4Q23: Second Consecutive Record AUA; HK ePension Division Drives Growth
iFAST’s reported a surge in 4Q23 earnings (+917.1% yoy), bringing 2023 PATMI to S$28.3m (+340% yoy) and beating our expectations by 18%. This is mainly driven by the initial four-month contributions from the HK ePension division and growth in its core wealth management platform. Record-breaking AUA of S$19.8b (+13.8% yoy) was also achieved for the second consecutive quarter since end-21. Maintain HOLD with a 30% higher target price of S$8.56 (S$6.56 previously).
RESULTS
• Results above expectations. iFAST Corporation (iFAST) reported hypergrowth in earnings, with 4Q23 PATMI of S$13.2m (+917.1% yoy; +61.0% qoq), bringing 2023 PATMI to S$28.3m (+340.0% yoy) and beating our full-year forecast by 18%. Excluding the S$5.2m impairment loss associated with iFAST’s exit from the India business, 2023 PATMI still increased significantly by 143.3% yoy, mainly driven by higher net revenue from non-banking operations (+94.3% yoy). In 4Q23, net revenue rose 92% yoy and 36.9% qoq to S$57.1m, mainly due to the Hong Kong ePension division and the continued growth of iFAST’s core wealth management platform business.
• Record-high AUA achieved; net inflows remain positive. Assets under administration (AUA) for iFAST reached S$19.8b as at 31 Dec 23 (+13.8% yoy; +3.6% qoq), achieving a record high for the second consecutive quarter since end-21. The Singapore market continues to be the key driver for growth, contributing another record-breaking S$14.5b in AUA (+14.3% yoy; +3.8% qoq). The AUA for Singapore’s B2B division also hit another record high, growing 9.5% yoy. With the current interest rate environment, bonds and cash accounts & deposits were the growth drivers, making up 11% (+1.1ppt qoq) and 6% (+0.8ppt qoq) of group AUA respectively. For unit trusts, AUA remained steady at S$12.5b, accounting for 63% of group AUA. We note that net inflows of client assets remained positive at S$334m in 4Q23 and S$1.96b in 2023.
• Final dividend maintained. iFAST proposed a similar fourth and final dividend of 1.4 S cents (4Q22: 1.4 S cents), bringing the full-year dividend to 4.8 S cents (FY22: 4.8 S cents). This represents a 50.1% payout ratio (FY22: 120.9%).
