IFast could be Singapore’s most underrated public internet company

Investors looking for fast-growing companies in the public market often turn their noses up at Singapore stocks. The perception is that the island republic’s market is only attractive for investors who prefer slower-growing, high-dividend yield plays.

Indeed, banks dominate the Singapore Exchange (SGX): DBS, OCBC, and UOB are some of the largest companies by market value.

Yet over the past year, a Singapore-based fintech company listed on the local bourse has seen its share price soar by over 400%. Today, iFast Corporation is valued at over S$2 billion (US$1.5 billion) and was one of the city-state’s best-performing stocks of 2020.

Founded in 2000, iFast is a wealth management platform that initially focused on the business-to-consumer segment, providing self-directed investors with research and easy access to mutual funds through its Fundsupermart.com brand. Since then, it has expanded to other segments including business-to-business and B2B2C.

The rocketing share price has been supported by strong revenue and profit growth.

Over the 2016 to 2020 period, iFast’s net revenue had a compound annual growth rate (CAGR) of 21%, while the CAGR for profit before tax was around 43%.

A significant driver of financial results, assets under administration (AUA) represents the total net value of investment products held under iFast’s custody. It is also a source of recurring revenue as the company charges clients a fee based on a percentage of AUA. In 2020, recurring net revenue contributed to 70% of iFast’s overall net revenue.

From 2016 to 2020, iFast’s AUA hit a CAGR of around 24%, going up from S$6.1 billion to S$14.5 billion.

The company’s ability to grow AUA and revenue while increasing its profit margin demonstrates its ability to enjoy scaled growth.

Under the radar

How iFast stood the test of time

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