iFAST

[Curiousparty]

Recurring revenue is from accumulated AUA which had since regained the $10bil as of 22 April !

Hence with or without non recurring revenue , ifast profit is going to be sustained .

Key is to monitor the new inflow - the “secret ingredient “ ( family offices , IAMs etc )

A lot of people didn’t realize that How it was possible for ifast AUA not to drop much when the global market crashed in Q1 2020?

Because there was new inflow, ie strong underlying organic growth !!

Assuming the new organic inflow and growth continues and the China losses narrowing , this is going to be a double “happiness”

Massive growth in net income !!!

Platform business and positive network effect at work — > Marginal cost is almost zero to earn that extra new revenue !!!

Ifast is at the cusp of a massive transformation!
(Look at google and Facebook charts below)


Regards


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[Curiousparty]

https://researchwise.dbsvresearch.com/Re...=fdecakhea


Upgrade to BUY;
beneficiary of acceleration of Fintech services adoption pace. IFAST report a strong set of 1Q20 results despite major sell-offs in financial markets globally. In the medium-tolong term, the COVID-19 crisis is expected to lead to an acceleration in the pace of digitalisation of financial services, and the pace of adoption of Fintech services by consumers, where iFAST is a beneficiary.  

Near term, market volatility and continued investment in its platform will continue to affect iFAST’s bottom line, while its China operation is still loss-making. 
However, the pace of increase in operating expenses is expected to moderate to 6.89.5% y-o-y in 2020, from the double-digit increase in the last few years. We expect the increase in revenue to more than offset the pace of rising costs.    

More room for AUA growth. We maintain our AUA growth assumption of 8% p.a. for FY20F and FY21F. We believe that there is still room for growth as the current AUA level remains low, at about 10% of the c.S$100bn in AUM of the authorised and recognised collective investment schemes in Singapore.    

Potential catalysts: Stronger growth in AUA; turnaround in China operation; obtaining operational leverage via higher margins.

Valuation: Upgrade to BUY with higher TP of S$1.27. We revise up our FY20F and FY21F earnings forecasts by 18% each after imputing higher non-recurring revenue, while retaining our AUA growth assumption. Our TP of S$1.27 (previously S$1.10) is still based on the Dividend Discount Model (DDM) valuation methodology, given that it is a cash-led business.

[Curiousparty]

The result is good precisely because of crisis. The investing/ trading mindsets.

https://links.sgx.com/FileOpen/iFAST_Res...eID=607725

page 25 & 26 provide a good picture. page 25 also say how good it was for ifast during 2007/2008. So I won't be surprise how good 2020 will be for ifast, follow by falling of the cliff - just like 2009.

These non-recurring trading revenues has lower profit, which explain the reduction in GP margin. operating leverage push up the net margin.

If u look at q4 last year , you can suss out the inherent organic growth ...

In fact , q4 last year surprised to the upside !


Management has also explained during PreAGM Q and A session that this net inflow effect is not likely to be one off and is in fact the manifestation of their positive efforts over the years in terms of business models , and this effect has merely become more obvious over time .....



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[holymage]

A lot of its past and recent success has been due to its competitive pricing, and absence of competition.

Today, Phillips offers the same platform services for both the B2C and B2B2C segments, and at much more competitive (or no) fees. If Phillips does not receive any sales and platform fees from the consumer, this means that they are only receiving trailer fees from the Fund Managers.

Since Phillips does not receive fees from the customer, this means that they probably share the trailer fees with the FAs, for its B2B2C segments.

iFAST receive fees from both the customer (whether through FAs or otherwise), and the FMs.

So Phillips is probably earning only half of what iFAST does, for providing similar service.

For now, the Financial Advisors, which iFAST depends for much of its B2B2C revenue and profit, will likely remain with them. But in the longer term, there is nothing stopping the FAs from moving their business to Phillips, especially if doing so will mean lower (or no) fees for their customers.

For the B2C segment, iFAST looks like it is able to provide much better research material than Phillips. But Phillips' no fees proposition is certainly something iFAST should watch out for, especially if Phillips sustains its pricing strategy.

Karlmarx, do you mind sharing the source regarding Phillips fees?

[karlmarx]

It can be found on its website.

B2C:
https://unittrust.poems.com.sg/introduct...advantage/

B2B2C:
https://www.phillip.com.sg/institutions/...s-brokers/

[Curiousparty]

https://secure.fundsupermart.com/fsm/art...mber-award


Testament to the fact that ifast has stolen lunches away from many other brokers ....


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[weijian]

https://secure.fundsupermart.com/fsm/art...mber-award





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hi curiousparty,
appreciate it if you can add something for context, rather than a 1 liner link.

Moderator

[Curiousparty]

Raffles Family Office seeks to target Chinese ultra-high net worth individuals’ onshore needs through a newly formed joint venture with wealth management fintech platform iFast.

https://www.finews.asia/finance/30014-ra...with-ifast

The newly formed joint venture – Raffles China Family Office (Raffles China) – will deliver a «family offices and related management model» to target a market gap fuelled by continued strong wealth generation and recent economic headwinds. The joint venture's headquarter is based in Shanghai with plans to expand into Beijing, Chongqing and Zhejiang, depending on business growth.

«Following the increase in demand for family offices and related management services in China, the existing product selling-based style provided in China no longer matches the needs of UHNW families,» said Ray Tam, managing director & co-founder of Raffles Family Office.

«Raffles Family Office has a professional and international team and iFAST Corporation has a tremendous client base and influence in Asia,» added Kwan Chi Man, CEO and founder of Raffles Family Office. «The two of us together will create a synergy which unlocks a lot of new business opportunities in China, creating a win-win situation for both of us.»

In a interview with finews.asia in June, Raffles Family Office said that it had $2 billion in assets under management and would target to grow this to $10 billion by January 2020 – an ambitious pursuit that Kwan said could be done through the acquisition of smaller asset managers with $50 to $200 million in Hong Kong and Singapore.

[EnSabahNur]

A lot of its past and recent success has been due to its competitive pricing, and absence of competition.

Today, Phillips offers the same platform services for both the B2C and B2B2C segments, and at much more competitive (or no) fees. If Phillips does not receive any sales and platform fees from the consumer, this means that they are only receiving trailer fees from the Fund Managers.


===

The market for wealth management in Singapore is huge.

But most of the market is captured by the (local) banks and life insurers.

The boutique FAs which iFAST depend on to grow their AUA grow through word-of-mouth networks; they lack the cachet and financial strength to not only advertise their services to the mass market, but also to attract sales agents.

So it makes a lot of sense for them to have made early moves into overseas markets.

In the Malaysian and Hong Kong markets, iFAST has done well to grow them profitably. (Phillips operate in these markets as well, but I'm not sure if they offer the no fee unit trust platform in those markets as well.)

In the Chinese market, iFAST has spent 5 years and lots of money, but still struggles to establish a profitable business. Given the amount of time spent and local competition, it does not look likely that their Chinese business will be a roaring success in the next few years.

Although they have partnered RFO to make another attempt at cracking the market, there is little to suggest that the probability of success will be high, since RFO is also a relatively new outfit.

iFAST also spent some 10 years in India, where it partnered with Deutsche. AR19 shows that its India AUA is about half a billion, and the unit does not appear to be profitable.

So iFAST's overseas forays are a mixed bag. While it has done well in Singapore, it certainly isn't the case that success follows wherever they bring their business model to.

===

If iFAST wins a digital wholesale banking license, there certainly will be growth prospects.

But the synergies between personal wealth management and SME banking is not apparent to me.

I suppose there could be some SME customers using part of their excess cash to buy low-risk unit trust. But I'm not sure if the market for it will be a big boost to AUA.

But iFAST also seems to be departing from its familiar grounds by entering a business it has no prior experience of; underwriting SME loans.

In its FY19 AR, it only made short mention of attracting foreign currency deposits, and avoiding competition for SGD deposits. How that fits with its DWB and/or wealth management strategy is still not apparent.

===

Thanks for your insights.

Yes, I think iFast succeeded in HK and Malaysia because these are markets where they don't have competition. I am surprised that HK doesn't have a lot of online platforms to compete with them. 

What I cannot understand is how they have the advantage over Philips given what you said about their low-cost offerings. Not sure if any body here have insights.

[Sumeria]

FSM may be doing well, but as a client of FSM I must warn others who want to open an account with them that its website for trading shares is very prone to technical problems. For example, for one hour this morning since market opened, the system is full of tech problems. My orders can take a few minutes to go through, and after they have, they are shown as "Reveived" rather than "Queued", and is not shown on SGX system, until another few minutes. If you like to withdraw, you can't either. One moment the system will show you have purchasing limit, and the next moment, it will tell you that your account is under review, and will take 3 days to be completed. Without purchasing power, you can't key in any order at all.
This is not a one-off problem. They have system problems regularly. As a result, I have to leave my account with other broker open. Also, if you leave your shares under FSM custody, and the above problem arises, you can't sell your shares through other brokers at all, since they are not held under CDP. To transfer your shares to CDP takes them easily 2 weeks, a time period that is ridiculously long in this age!
So those who want to switch out of other brokers to FSM, beware.