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Not so fast on iFast despite positive outlook, says RHB

Stanislaus Jude Chan
Stanislaus Jude Chan • 2 min read
Not so fast on iFast despite positive outlook, says RHB
SINGAPORE (Oct 30): RHB Research says the outlook on investment products distribution platform iFast Corporation looks positive amid its earnings recovery and a bullish sentiment in the equity markets.
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SINGAPORE (Oct 30): RHB Research says the outlook on investment products distribution platform iFast Corporation looks positive amid its earnings recovery and a bullish sentiment in the equity markets.

iFast on Friday reported a 21.5% increase in earnings to $2.3 million for 3Q17 ended September, on the back of a 24.9% rise in revenue to $26.2 million.

As at end September, the group’s assets under administration (AUA) grew 19.3% y-o-y to reach a new record of $7.16 billion.


See: iFAST reports 21.5% rise in 3Q earnings to $2.3 mil on higher revenue

“Over the last two years, the group has been busy broadening the range of products and services on its investment platform to position itself for potential growth opportunities and changes in the wealth management industry in Asia,” says RHB analyst Jarick Seet in a report on Monday.

And there is more room for its AUA to grow. According to Seet, iFast’s current AUA level remains relatively small compared to the size of the wealth management industry in Singapore as well as its other markets.

However, RHB is keeping its “neutral” rating on iFast with an unchanged target price of $1.01.

This is due to “continued losses projected at the Chinese operations, coupled with the stock’s rich valuations,” says Seet.

“In addition, iFast’s profitability has a strong correlation to the stock market’s performance,” he adds. “And being prudent, there is a risk of a market correction, which may then negatively impact its profitability.”

As at 12.10pm, shares of iFast are trading 4.5 cents higher at 98.5 cents, representing an increase of 4.8%. This implies an estimated price-to-earnings ratio of 26.2 times and a dividend yield of 2.3% for FY17.

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