The Securities Investors Association (Singapore) (SIAS) recently started an initiative to review companies’ annual reports and raise questions to help clarify information for shareholders. This seems like a great initiative that should not only make companies more transparent, but also make investing in local stocks more appealing to investors.
iFAST Corporation Ltd (SGX: AIY) was one of the companies selected to be reviewed by SIAS. Here are three key things investors should note from its response to the queries brought forward by SIAS.
Regarding what needs to be achieved to hit its S$100 billion assets under administration by 2028
In the 2018 chairman’s message, it was disclosed that iFAST set a goal of S$100 billion assets under administration (AUA) by 2028. As of 31 December 2018, iFAST had AUA of $8.05 billion.
SIAS questioned the key milestones that need to be achieved for iFAST to hit this target. To put it in perspective, the S$100 billion AUA target would require a compound growth rate of slightly more than 28% per year, compared to the average AUA growth in 2018 of 20%.
In its response, iFAST highlighted three key milestones that will need to be achieved. These include:
- Having a market leadership positions in key markets such as Singapore, Hong Kong, and Malaysia.
- Offering innovative fintech services that differentiate iFAST from the competition.
- Continuing to expand its fintech ecosystem.
It also highlighted that while the group believes the targets are achievable, they are not intended to be specific profit guidance or forecasts.
Regarding its failure to get a virtual banking license in Hong Kong in 2018
In 2018, iFAST said it was not one of the first batch of shortlisted companies in Hong Kong to progress into the next phase of the application. However, iFAST said that despite the failure, the group will continue to pursue the virtual banking license application in Hong Kong.
iFAST believes its fintech ecosystem gives it the platform to start a virtual bank in Hong Kong, which will provide basic banking services. The virtual banking platform will also improve the capability of iFAST’s wealth management platform.
Beyond Hong Kong, iFAST also sees a growing trend in countries offering opportunities to apply for virtual banking licenses, and it will be exploring these possibilities to see if they are feasible options through which to grow its business.
Regarding competition in China
In China, social media platforms such as Yu’e Bao and Lingqiantong use a business-to-consumer (B2C) model, where financial services products are sold directly to end consumers.
iFAST, on the other hand, differentiates itself from them through its B2B2C model. In essence, iFAST signs up companies that want to enter the wealth-management space by offering clients investment solutions. iFAST uses its fintech solutions to empower these companies with B2C capabilities, and these companies are then able to focus on growing AUA with their client base.
iFAST also highlighted that some of the B2C competitors focus mostly on money market funds, while iFAST China has a wider range of products available on its platform.
iFAST China is also putting forth a Private Fund Management license application so it can provide a complete financial advisory solution for investors and platform partners.
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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 Jeremy Chia doesn’t own shares in any companies mentioned. The Motley Fool Singapore recommends iFAST Corporation Ltd.