iFAST Corporation Limited’s (SGX: AIY) share price fell by nearly 12% in a single day, following the release of its 2025 first quarter (1Q 2025) results.
This sharp decline raised some eyebrows.
Your first thought might be: “did they have a bad quarter?”
Well, let’s take a look at some of the key numbers for the quarter.
Gross revenue increased by a healthy 24% year-on-year (YOY) to roughly S$107 million, while net profit leapt by an impressive 31% YOY, exceeding S$19 million.
In addition, the group’s assets under administration (AUA) hit a record high of S$25.68 billion.
It’s hard to argue that those aren’t remarkable results.
So, what triggered the 12% drop?
Lowered 2025 profit target for the Hong Kong (HK) segment
The key culprit appears to be the performance of iFAST’s HK segment.
While the overall picture looks bright, the HK business reported a 6.8% YOY dip for its first quarter’s net profit.
Tellingly, iFAST reduced its 2025 profit before tax (PBT) target for the HK segment, from the initial HK$500 million to HK$380 million.
Why the revision?
The change boils down to higher-than-anticipated operating expenses associated with the ongoing onboarding of the massive eMPF (Mandatory Provident Fund) platform.
Having navigated some initial challenges during last year’s onboarding phase, the group decided to allocate more resources to ensure a smooth and successful execution for the remainder of the year.
Now, while market concern over a lowered target is understandable, the crucial question is: does this single adjustment justify such a significant drop in iFAST’s share price?
Why this could be an investment opportunity
Consider this: beyond the Hong Kong blip, the rest of iFAST’s geographical segments are displaying encouraging growth.
Notably, Singapore, which contributes over 70% of the group’s AUA, delivered robust double-digit YOY growth in both revenue and net profit.
Furthermore, even with the revised figure, the HK segment is still projected to achieve a substantial 23% PBT growth in 2025 over the previous year.
Looking ahead to 2026, with double-digit growth anticipated for the HK business, the trajectory remains firmly upward.
The group’s growth story isn’t solely confined to wealth management; iFAST Global Bank (iGB) is emerging as another key driver.
With customer deposits more than doubled YOY to S$1.15 billion by the end of 1Q 2025, iGB continues to gain substantial traction.
This impressive deposit growth is translating into profitability.
iGB posted its second consecutive profitable quarter, raking in S$1 million in net profit for 1Q 2025, following its maiden profit of S$0.3 million in the previous quarter (4Q 2024).
The recent launch of iGB’s Debit Card and Flexible Cash Individual Savings Account in March, is anticipated to further boost deposits, propelling the digital bank towards full-year profitability in 2025.
That’s a significant turnaround from last year’s S$4.4 million loss, and the story doesn’t end there.
While still in its early stages, the potential synergy between iGB and the wealth management businesses presents an exciting future growth opportunity.
Get Smart: Focus on the actual results and not targets
As the saying wisely reminds us, “Expectation is the root of all heartache.”
Think about it: if iFAST hadn’t provided a specific target, wouldn’t these results be met with widespread applause?
Whether this price dip translates into a compelling buying opportunity boils down to your long-term conviction in iFAST’s innovative fintech business and its future growth potential.
If you are confident in its ability to deliver sustained double-digit growth, then this temporary market reaction could very well be the favourable entry point you’ve been waiting for to capture the fintech’s long-term value.
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Disclosure: Chan Kin Chuah owns shares of iFAST.
