IFAST Corporation: Results First Take: Growth trajectory intact despite slow start
- 1Q25 results slightly below expectations, weighed down by higher investments in ePension business.
- Continued strength in AUA growth, iFAST Global Bank scaling up rapidly.
- ePension ramp-up softens near-term Hong Kong earnings; 2H25 rebound expected with double-digit growth projected in 2026
- Maintain BUY; expect robust FY25F/FY26F growth despite slow start.
1Q25 results slightly below expectations on softer ePension contribution. iFAST’s 1QFY25 net profit rose 31.2% y/y to SGD19.04m, on the back of the 24.4% y/y and 2.7% q/q gain in revenue to SGD106.92m. This was driven by solid growth in its core wealth management business and a sharp turnaround of iFAST Global Bank (iGB). 1QFY25 revenue and net profit account for 20%/19% of our full year forecast, slightly below expectations though we continue to anticipate a stronger 2H. Assets under administration (AUA) rose 22.0% y/y to a record SGD25.68bn, supported by SGD938mn in net inflows during the quarter, despite prevailing market volatility. The digital bank delivered 1QFY25 net profit of SGD1.0m, after the first quarterly profit of SGD0.4m in 4QFY24, buoyed by a 104.9% y/y jump in gross revenue to SGD19.5m and robust customer deposit growth (+123.6% y/y). New initiatives such as debit cards for multi-currency accounts and seamless remittance integration also contributed to banking momentum. The EzRemit division had a strong quarter, contributing to a 73.8% y/y increase in non-interest net fee and commission income. Meanwhile, growth in Hong Kong was weighed down by higher investments in the ePension division, with PBT declining 6.8% y/y despite a 12.8% increase in revenue. The dip in profitability is due to increased investments in the ePension division ahead of onboarding activity. However, both the revenues and profitability of the ePension division are expected to be higher in the second half of 2025 as the overall onboarding of the eMPF platform progresses to a substantially higher level.
Robust FY25/FY26 growth despite slow start. On the back of the higher investments for the ePension business, the group has lowered the PBT guidance in 2025 for the Hong Kong business by 24% to HKD380m, from HKD500m. No change in revenue guidance. For 2026, the group expects double-digit y/y growth in revenue and PBT for the Hong Kong business. Despite the lower-than-expected contribution from the ePension division in 1QFY25, the Hong Kong business is still projected to deliver 23% y/y PBT growth for 2025. We remain positive on the Group’s overall trajectory and expect solid progress across its key business segments. We have penciled in a comfortable 20% y/y growth in AUA for both 2025 and 2026, compared to the 22% y/y increase reported in 1QFY25. iFAST Global Bank (iGB), though still relatively small, continues to gain traction, while the ePension division—the primary growth engine—is expected to contribute meaningfully in 2H25 as onboarding of the larger trustees ramps up. Following the onboarding phase, which is targeted for completion by end-2025, iFAST will transition into providing ongoing maintenance and operational support, ensuring a steady and recurring revenue stream. As such, we continue to expect robust growth in both revenue and profitability for FY25F and FY26F.
We currently have a BUY call with a target price of SGD10.88. More updates to follow after Monday’s briefing.
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