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iFAST Corporation Ltd Talks About Growth In China And Its Entry Into The Stockbroking Business

iFAST Corporation Ltd (SGX:AIY) held its 2016 second-quarter earnings briefing recently.

The common investor in Singapore may be familiar with fundsupermart.com, the company’s main consumer facing product. The business of iFAST can be divided into two buckets: the B2C (business-to-consumer) division and the B2B (business-to-business) division.

During the briefing, iFAST shared its future outlook and touched on a few areas, including China and its entry into the stockbroking business.

The Middle Kingdom

iFAST’s chief executive Lim Chung Chun talked about the outlook on China. He focused on this slide:

2016-10-18-ifast-corporation
Source: iFAST’s earnings presentation  

Lim said:

“For China, we obtained the license, formally, at the end of last year.

But it took us quite a while to get the actual platform setup, and the all the products put on the platform. As of today, we actually carry products from over 20 fund houses and over 1,000 funds.”

For context, iFAST’s China operations recorded net revenue of S$0.05 million for the first-half of 2016. Much of it came in the second quarter, according to Lim. He went on to describe the company’s China strategy:

“One of our key strategy in China is that we are essentially operating a platform-cum-IFA incubator strategy. So, more than just a platform. We have our own in-house advisors. This is in addition to our B2B business that the way we have done historically.

We believe that the IFA incubator strategy will help expedite the overall momentum we can see in China.”

Overall, investors might want to note that it is still early days for iFAST in the middle kingdom. The firm’s China operations also recorded losses of S$1.56 million in the first-half of 2016.

Stocks, stocks, stocks

Lim also talked about iFAST’s entry into the stockbroking business:

2016-10-18-ifast-stockbroking
Source: iFAST’s earnings presentation  

He elaborated on this new business for the company:

“Stockbroking business is generally seen as a business whereby the margins are under pressure. And I suppose not everybody understands the strategy that we are trying to implement for the stock broking business.

Essentially, the strategy that we are looking is to have is a bit different from most stock broking firms.

In terms of business model, we are not really looking at a transactional model, the way that most stockbroking firms have in Asia as a business model. What we feel that is actually important is to provide an integrated platform that allows us aggregate the assets.

And like it or not, stocks is still a major source of wealth for most individuals.”

This ties back to iFAST’s long-term vision of turning into an integrated investment products distribution platform. Lim said stocks are a key part of the equation here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.