iFast plunges 12% after cutting its Hong Kong profit guidance
This is after the company lowered its 2025 Hong Kong profit before tax target to HK$380 million from HK$500 million
[SINGAPORE] iFast shares plunged as much as 12 per cent on Monday (Apr 28) morning, after the investment platform operator revised its Hong Kong operations’ profit target and reported first-quarter earnings.
As at noon, the counter dropped 12.1 per cent or S$0.87 to S$6.32, and closed at S$6.35.
As at 9.50 am on Tuesday, shares of iFast dropped 0.6 per cent or S$0.04 to S$6.31.
The Singapore-based company cut its Hong Kong profit before tax target for 2025 to HK$380 million (S$64.3 million) from its previous guidance of HK$500 million, based on its earnings report on Friday (Apr 25).
iFast reported a net profit rise of 31.2 per cent year on year to S$19 million for the first quarter ended Mar 31, which was driven by a 24.4 per cent year-on-year increase in revenue to S$106.9 million.
This was largely due to a turnaround in its UK bank and continued growth in the group’s core wealth management platform business.
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DBS said on Apr 25, after iFast reported earnings, that its Q1 revenue and net profit were slightly below expectations.
“Growth in Hong Kong was weighed down by higher investments in the ePension division, with PBT declining 6.8 per cent year on year despite a 12.8 per cent increase in revenue. The dip in profitability is due to increased investments in the ePension division ahead of onboarding activity,” said DBS.
ePension refers to its pension administration services.
“However, both the revenues and profitability of the ePension division are expected to be higher in the second half of 2025 as the overall onboarding of the eMPF platform progresses to a substantially higher level,” the bank added.
DBS has a “buy” call on iFast with a price target of S$10.88.
Meanwhile, UOB Kay Hian has a “buy” call with a target price of S$7.28.
The brokerage said that iFast’s Q1 2025 net profit had “slightly missed” expectations.
This was due to higher-than-expected operating expenses from the Hong Kong ePension division on resource ramp-up, the analysts said on Tuesday.
Despite the stronger-than-expected performance in 2023 and 2024, the analysts remain cautious for the rest of FY2025 – cutting their forecast for profit before tax by 10 per cent.
“While the Hong Kong ePension division has contributed significantly, only six out of 24 schemes under the MPF system have onboarded in ascending order of assets under management,” they said. “Given the technical and operational risks associated with onboarding larger schemes and the ongoing ramp-up in staff headcount, we maintain a conservative outlook.”
The bank has cut earnings forecast between 13 and 14 per cent for the next two years.
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