iFAST Corporation - Dragged By Higher Operating Costs

iFAST Corporation - DBS Research 2022-10-27: Dragged By Higher Operating Costs

iFAST Corporation - Dragged By Higher Operating Costs

SGinvestors.io

Published: 2022-10-28 07:14 PM

IFAST CORPORATION LTD. (SGX:AIY)

iFAST (SGX:AIY)'s 3Q22 net revenue of S$30.07m (- 1.3% y-o-y, +0.7% q-o-q) as global financial markets continued to go through very difficult conditions. See iFAST's earnings announcement dated 26 Oct 2022.
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Recurring net revenue (non-banking operation) was up a healthy 5.9% y-o-y, largely due to higher net interest income. For the 9-month period, recurring revenue accounted for 69.9% of total revenue.

Operating costs were higher, +19.5% y-o-y for 3Q22, as iFAST prepares for the ePension business which will become operational from 2023, while positioning itself for opportunities arising from a more globalised wealth management and digital banking business model. As a result, net margin declined to 4.0% for 3Q22, vs 13.7% for 3Q21 and 4.7% for 2Q22, excluding impairment charge for the India business.

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A third interim dividend of S$0.013 was declared for 3Q22, similar to 3Q21. See iFAST's dividend history.

AUA of S$16.98bn as of 30 September 2022 was down 7.6% y-o-y and 3.9% q-o-q as a result of sharp declines in most equity and bond markets, as well as the group’s decision to exit the onshore platform service business in India. Despite the challenging markets, net inflows of client assets remained healthy in 2022, with positive net inflow of S$599m in 3Q22 and S$1,861m in 9M22 respectively.