Broker: UOB Kay Hian
Date of Report: Tuesday, 29 April 2025

Singapore Market Insights: iFAST Corporation’s Upward Trajectory and CapitaLand Ascott Trust’s Resilient Hospitality Strategy

Market Overview: Key Indices and Movers

The Singapore market reflected mixed sentiment on 29 April 2025, with key indices such as the FSSTI closing at 3,811.8, down 0.3% for the day but up 1.4% for the week. Top trading turnover was led by heavyweights:

DBS Group Holdings: S\$42.30 (-0.1%)
United Overseas Bank: S\$34.42 (-0.4%)
Oversea-Chinese Banking Corp: S\$15.83 (-0.4%)
Singapore Telecommunications: S\$3.79 (+0.8%)
Yangzijiang Shipbuilding: S\$2.25 (+2.3%)

Among the top gainers were Hutchison Port Holdings Trust (+4.7%) and Golden Agri-Resources (+4.2%). However, iFAST Corp experienced a notable drop of 11.7% despite positive operational updates.

Macroeconomic Forecasts and Sectoral Outlook

UOB Kay Hian’s economic projections highlight moderate growth across the region for 2025:

US GDP: 1.8% (2025F)
Singapore GDP: 2.5% (2025F)
China GDP: 4.2% (2025F)
Brent crude (average): US\$70.0/bbl (2025F)
CPO: RM4,500/mt (2025F)

These assumptions frame the underlying expectations for company performance and market opportunities.

iFAST Corporation: Solid Growth in AUA and Profitability Drives Upgrade to BUY

Ticker: IFAST SP
Share Price: S\$6.35
Target Price: S\$7.28 (Upside: +14.6%)
Sector: Financials
Market Cap: S\$1,922.9 million
Major Shareholders: Lim Chung Chun (20%), Singapore Press Holdings (11.9%)

1Q25 Results Snapshot

	1Q25	1Q24	YoY % Chg	4Q24	QoQ % Chg
Revenue (S\$m)	106.9	86.0	+24.4%	104.1	+2.7%
Net Revenue (S\$m)	67.7	58.1	+16.5%	64.8	+4.5%
PATMI (S\$m)	19.0	14.5	+31.2%	19.0	Flat
PATMI Margin (%)	17.8	16.9	+0.9ppt	21.8	-4.0ppt

iFAST delivered S\$19 million in net profit after tax and minority interest (PATMI), up 31% year-on-year, mainly driven by a robust 24% increase in group revenue. However, profit marginally missed expectations due to higher operating expenses, especially from the Hong Kong ePension division.

Operational Highlights

Record AUA: Assets under administration (AUA) hit S\$25.7 billion (+22% yoy, +3% qoq), driven by net inflows of S\$938 million.
Singapore Growth: Remains the core market, with AUA at a record S\$18.1 billion, accounting for 70% of group total.
iFAST Global Bank (iGB): Achieved a S\$1 million net profit in 1Q25 (vs. a S\$2.3 million loss in 1Q24), with gross revenue up 105% yoy to S\$20 million. Customer deposits surged 124% yoy to S\$1.15 billion.
Dividend: Interim DPS raised to 1.6 S cents, up from 1.3 S cents a year ago.

Hong Kong Operations: Mixed Performance

Revenue: S\$35 million (+13% yoy), net revenue S\$29 million (+5% yoy).
PBT: Down 7% yoy to S\$12 million, due to higher ePension division costs from resource ramp-up.
Only 6 out of 24 MPF schemes onboarded; operational and technical risks for larger AUM schemes persist, prompting a conservative outlook.
2025 Guidance: PBT guidance for HK operations cut by 24% to >HK\$380 million, with revenue unchanged at >HK\$1.2 billion. 2025 PBT margin now expected at 32% (down from 41%), but still implies a 23% yoy growth.
Double-digit growth in both revenue and PBT expected in 2026 as efficiency improves.

Strategic Moves and Regional Expansion

iFAST entered Thailand through a partnership with TSFC Securities, aiming to build a co-branded fintech platform for offshore bond trading. This supports iFAST’s target to scale AUA to S\$100 billion by 2028–2030.

Updated Financial Forecasts

	2023	2024	2025F	2026F	2027F
Net Turnover (S\$m)	257	383	524	610	698
EBITDA (S\$m)	66	141	129	152	180
Net Profit (S\$m)	28	67	85	99	117
EPS (S\$ cents)	9.3	21.9	32.2	37.4	44.3
PE (x)	68.1	29.0	19.7	17.0	14.3
Dividend Yield (%)	0.8	0.9	1.6	1.8	2.2
ROE (%)	12.0	23.5	24.2	23.2	22.8

Valuation and Investment Thesis

The stock is upgraded to BUY with a revised target price of S\$7.28, based on 25x 2025F EPS (0.5 standard deviation below historical mean). iFAST trades at a compelling 19.7x 2025F PE—around a 20% discount to peers (24.9x). The three-year earnings CAGR is projected at 26.4% for 2025–2027.

Share Price Catalysts:

Stronger-than-expected AUA growth
Faster onboarding of MPF trustees in Hong Kong
Lower-than-expected eMPF platform costs

CapitaLand Ascott Trust: Defensive Hospitality Amid Macro Headwinds

Ticker: CLAS SP
Share Price: S\$0.85
Target Price: S\$1.38 (Upside: 62.4%)
Sector: Real Estate
Market Cap: S\$3,239.7 million
Major Shareholder: Temasek Holdings (33.6%)

1Q25 Business Update: Robust RevPAU and Occupancy

RevPAU: Up 4% yoy to S\$141, surpassing pre-pandemic levels by 13%.
Occupancy: Improved 4ppt yoy to 77%.
Key Markets: Australia (+13% yoy), Japan (+17%), UK (+12%), US (+11%).
Long-Stay Properties: Now 17% of portfolio value and 19% of gross profit, offering defensiveness with an average stay of two months.
Distribution Yield: 2025F yield at 7.1%.

Operational Performance by Geography

Australia: RevPAU for serviced residences and hotels grew to A\$175 (+13% yoy), buoyed by leisure events and group bookings.
Japan: RevPAU surged to ¥21,393 (+17% yoy), with occupancy for rental housing above 95%. Strong international bookings and a positive 2Q outlook due to seasonal events.
UK: RevPAU reached £183 (+12% yoy), supported by refurbished Citadines Holborn-Covent Garden and robust corporate travel. London Marathon and group bookings to underpin 2Q25.
US: RevPAU increased to US\$160 (+11% yoy), led by student accommodation (leased occupancy 90%, rent growth 4.5%). Domestic and corporate travel remain resilient.

Financial Highlights and Balance Sheet

	2023	2024	2025F	2026F	2027F
Net Turnover (S\$m)	745	810	743	768	784
EBITDA (S\$m)	302	331	347	359	367
Net Profit (adj., S\$m)	99	140	159	168	172
DPU (S\$ cent)	6.6	6.1	6.1	6.4	6.5
DPU Yield (%)	7.7	7.2	7.1	7.5	7.6
Net Debt/Equity (%)	55.0	53.0	57.3	60.4	63.8
Interest Cover (x)	3.7	3.3	3.4	3.5	3.4
ROE (%)	4.8	4.8	3.3	3.6	3.7

Balance Sheet Strength and Expansion

Aggregate Leverage: 39.9% (up 1.6ppt qoq), expected to ease post-divestment of non-core assets.
Interest Coverage: 3.2x, with 76% of debt at fixed rates and an average cost of 2.9%.
Swift Capital Deployment: Proceeds from divestments have been quickly reinvested to minimize income drag.

Strategic Portfolio Reconstitution

CLAS is pivoting toward long-stay assets, with plans to acquire student accommodation in the US, UK, Australia, and rental housing in Japan’s top cities.
S\$130 million earmarked for asset enhancements in London and Sydney properties during 2025–26.
Stable income sources (master leases, management contracts with minimum guarantees, long-stay assets) now contribute 60–70% of gross profit.

Recent Acquisitions and Accretive Deals

Acquisition of two freehold hotels in Japan (ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae) for JPY21 billion (S\$178.5 million), at an 8.3% discount to valuation and a net operating income yield of 4.3%. This is accretive to pro forma 2024 DPS by 1.6%.
Post-acquisition, Japan will account for 18% of CLAS’s total assets.

Valuation and Outlook

CLAS’s target price remains S\$1.38, using a DDM model (cost of equity: 7.25%, terminal growth: 2.8%). The trust offers defensive exposure to hospitality, with stable distributions, healthy balance sheet metrics, and a diversified, globally positioned portfolio.