Last year, iFAST Corporation Limited (SGX: AIY) reported a strong set of earnings after receiving a huge boost from its Hong Kong ePension contract.
For 2024’s first quarter (1Q 2024), the fintech saw its net profit jump sharply with continued contributions from its Hong Kong division.
More importantly, the group upped its interim dividend by 30% year on year.
Here are five things that investors should know about the fintech’s latest results.
A sparkling set of results
Revenue soared by 59.4% year on year to S$86 million.
Total operating expenses climbed by 46.8% year on year leading to operating profit leaping by more than four-fold year on year from S$4 million to almost S$18.5 million.
As a result, net profit soared 387% year on year to S$14.5 million.
The strong increase in profitability was attributed to contributions from the Hong Kong ePension business along with improvements in the group’s core wealth management platform business.
iFAST declared an interim dividend of S$0.013, 30% higher than the S$0.01 paid out a year ago.
iFAST’s balance sheet held S$452.5 million in cash and investments with just S$44.7 million of debt.
AUA hits a record high amid healthy net inflows
The group’s assets under administration (AUA) have also been steadily climbing in tandem with net inflows.
iFAST’s AUA hit a record high of S$21.05 billion, up 16% from the S$18.14 billion reported in the same period last year.
Net inflows for the latest quarter came in at S$688 million, more than double the amount recorded a year ago.
As for gross unit trust subscriptions, this figure was also higher at S$1.6 billion for 1Q 2024 versus S$1.1 billion in 1Q 2023.
Hong Kong ePension contract flowing smoothly
Contributions from the ePension contract were significant.
The firm’s Hong Kong division’s net revenue jumped by 352% year on year to S$27.7 million.
Despite muted investor sentiment in Greater China, the Hong Kong operations still achieved a 1.1% year on year increase in AUA.
Net profit for the Hong Kong division did even better, shooting up more than fivefold from less than S$2.3 million in 1Q 2023 to over S$13.2 million in 1Q 2024.
Furthermore, the iFAST management team expects the ePension division to be an important growth driver for 2024 and 2025.
More digital bank initiatives
Elsewhere, iFAST’s digital bank, iFAST Global Bank or iGB, saw its customer deposits continue to grow.
Deposits soared 475% year on year to around £302.9 million as of 31 March 2024.
With a higher level of deposits and activity, the UK division’s revenue grew by 43.8% year on year to more than S$4.2 million in 1Q 2024.
That said, the division is still unprofitable, incurring a net loss of almost S$2.3 million, 33.7% higher than the S$1.7 million incurred a year ago.
iGB is adopting a conservative stance by placing the majority of these deposits (held as cash) with the Bank of England, short-duration investment-grade bonds, and money market funds.
As of 31 March 2024, there was a total of S$598.5 million placed in these securities, with the bulk (S$313.5 million) placed as cash with the central bank.
Advancing its three-year plan
As we review the quarterly results, it is important not to lose sight of the big picture.
iFAST remains focused on executing its three-year plan in which it targets its AUA to grow to S$100 billion by 2028 to 2030.
It also plans to accelerate the growth of its Hong Kong business by delivering on its ePension business there while improving on its existing platform capabilities.
Finally, the group intends to develop innovative fintech services such as payment-related services and a bond marketplace as complementary platforms to its digital banking and wealth management platforms.
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Disclosure: Royston Yang owns shares of iFAST Corporation Limited.
