What Does iFAST Corporation Ltd Do and How Does it Make its Money?

It is important to know what a particular company does and how it makes its money before investing in it. Investing in a business without such knowledge is akin to travelling to an unknown territory without a map.

On that note, let’s check out what business iFAST Corporation Ltd (SGX: AIY) is involved in and how it generates its revenue.

iFAST is an Internet-based investment products distribution platform that has a presence in Singapore, Hong Kong, Malaysia, China and India.

It has two main business divisions – one that caters to the consumers (B2C) and the other that caters to businesses (B2B).

Under the former, it owns, which caters to investors who prefer to do their own investments online.

Under the latter, it has iFAST Central and iFAST Global Prestige. They cater to the business needs of financial advisory firms, financial institutions, and banks advising retail and high net worth clients. This division also offers iFAST Pensions, which provides tax-effective employee benefit solutions to firms that wish to manage pension schemes for their employees via an Internet platform.

Some key numbers of the firm’s offerings are shown below:

Source: iFAST Corporation Ltd Annual Report 2016

Currently, iFAST offers around 5,000 investment products, which include exchange-traded funds (ETFs) and stocks listed in Hong Kong.

The table below summarises how the firm classifies its revenue and how much each segment brought in for the financial year ended 31 December 2016 (FY2016):

Source: iFAST Corporation Ltd Annual Report 2016 

The net revenue for FY2016 was S$40.7 million. Net revenue is the revenue earned by the firm after commissions and fees are paid or are payable to third party financial advisers. This figure is what investors have to keep an eye on.

Behind every ticker symbol lies a living, breathing business. Buying a stock without fundamental knowledge of what the company does and how it makes money can be dangerous.

Now that we know how iFAST rakes in revenue, we can then delve into other aspects of the firm such as its profitability, strength of its balance sheet, its cash generating abilities, and more.

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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 Sudhan P doesn’t own shares in any companies mentioned.