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Hello reader,
Many investors are natural optimists. So typically, they take a dim view of short-sellers, those who bet that a company’s share price will fall.
In a world where most investors are wagering on share prices going up, the prospect of someone making money off of the opposite makes many uneasy.
While I consider myself relatively optimistic by nature, I do have respect for short-sellers. It’s difficult to go against the grain, and short-sellers can face unlimited losses – in theory at least – since there’s no cap on how high a company’s share price can go.
This week’s featured story is about a little-known short-seller, Sakura Research, that put out a report on Singapore-listed bank and wealth management platform iFast (AIY, SGX).
The report questions how sustainable revenue from iFast’s Hong Kong ePension unit is, the performance of its UK digital bank, and even the sustainability of its core wealth management platform, which faces intense competition.
In response, iFast, along with sell-side research analysts that cover the company, have refuted the short-seller’s claims.
According to iFast, revenue from its ePension division can be sustained over the contract period of seven years. CEO Lim Chung Chun also stated that revenue recognition will actually increase going into 2026.
Meanwhile, analysts are keeping faith with iFast for now. They note that profitability (measured by profit before tax as a percentage of assets under administration) in the most recent half year is actually higher than in 2022.
Who’s right? We’ll leave you to read the story and make up your mind. Beyond that, while it’s a cliche to say that time will tell, that rings true in this case.
— Simon
THE BIG STORY
Image credit: Timmy Loen
IFast, analysts refute short-seller claims
The firm has continued to guide for revenue from its ePension unit to be sustained over a contract period of seven years.
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