Broker: CGS International
Date of Report: July 29, 2025

iFAST Corporation: Profit Growth Set to Surge in 2H25 Amid Hong Kong eMPF Acceleration

Overview: Strong 1H25, Robust 2H25 Outlook

iFAST Corporation Ltd is poised for an impressive acceleration in profit growth in the second half of 2025 as its Hong Kong business gains momentum, particularly through the onboarding of trustees for the city’s e-Mandatory Pension Fund (eMPF) project. The company reported 1H25 profit after tax and minority interests (PATMI) of S\$41.1 million, representing 44.9% of CGS International’s full-year estimate. This performance aligns with expectations, and management forecasts continued profitability growth both year-on-year and half-on-half in the coming quarters.

Hong Kong Business: eMPF Project Drives Revenue Surge

– iFAST’s net revenue in 2Q25 reached S\$80.0 million, up 30.4% year-on-year and 18.4% quarter-on-quarter. – Revenue growth was fuelled by onboarding larger trustees by assets under management (AUM) for the Hong Kong eMPF project. – Net revenue from Hong Kong soared 40.1% year-on-year and 37.7% quarter-on-quarter to S\$40.0 million in 2Q25. – 2Q25 PATMI for iFAST grew 37.9% year-on-year and 16.2% quarter-on-quarter.
Despite lowering its FY25 profit before tax (PBT) guidance for Hong Kong from HK$500 million (approx. S$81.8 million) to HK$380 million (approx. S$62.2 million) in April, iFAST’s Hong Kong business delivered 1H25 PBT of HK$163.7 million (approx. S$26.8 million), already accounting for 43.1% of the revised annual target. Management expects PBT from Hong Kong to exceed guidance as eMPF revenue recognition accelerates in 2H25, even with some onboarding possibly spilling into FY26.

Core Business Bolstered by Healthy Balance Sheet Growth

– Assets under administration (AUA) climbed 5.9% quarter-on-quarter to S\$27.2 billion in 2Q25. – Gross unit trust subscriptions increased 2.4% quarter-on-quarter to S\$2.3 billion. – Customer deposits for iFAST Global Bank (iGB) in the UK grew 25.8% quarter-on-quarter, reaching S\$1.4 billion.
Management highlighted seasonality in iGB’s business, with 2Q25 PBT down 30.3% quarter-on-quarter to S$0.6 million following a strong 1Q25 driven by festive remittances in the Middle East.

Dividend and Capital Structure: Potential for Higher Payouts

– Declared 2.0 Singapore cents dividend for 2Q25 (+33.3% yoy, +25% qoq). – Year-to-date dividend now at 3.6 cents, reflecting a 26.3% payout ratio within the guided 25–30% range. – Management targets a total dividend of 8.0 cents for FY25 and may consider increasing the payout ratio as ROE and capital structure stabilise, though no specific timeline was provided.

Key Financial Highlights and Upgraded Forecasts

CGS International has raised its FY25F–27F earnings per share (EPS) estimates by 2.6%–4.1%, citing better-than-expected revenue and profitability from the Hong Kong segment.
Key Financial Table:

Strategic Catalysts and Risks

Positive Catalysts:

• Scaling up of eMPF onboarding in Hong Kong, driving operating leverage.
• Continued growth in iFAST Global Bank’s contribution.
• 3-year EPS CAGR of 27.8% projected for FY24–27.

Risks:

• Potential shortfall in Hong Kong revenue guidance for FY25.
• Stagnant AUA could dampen wealth management business momentum.

Detailed Financial Performance: 2Q25 and 1H25

Quarterly Highlights (2Q25 vs. 2Q24):

• Revenue: S\$120.2m (+28.3% yoy, +12.5% qoq)
• Gross profit: S\$80.0m (+30.4% yoy, +18.2% qoq)
• Net profit: S\$22.1m (+37.9% yoy, +16.2% qoq)
• Net profit margin: 18.4% (up 1.3 percentage points yoy)
• EPS: 7.3 cents (+35.9% yoy)

Half-Year Highlights (1H25 vs. 1H24):

• Revenue: S\$227.2m (+26.4% yoy)
• Gross profit: S\$147.8m (+23.7% yoy)
• Net profit: S\$41.1m (+34.7% yoy)
• Net profit margin: 18.1% (up 1.1 percentage points yoy)
• EPS: 13.7 cents (+33.2% yoy)

Hong Kong eMPF Trustee Onboarding Timeline

A detailed onboarding schedule for eMPF trustees in Hong Kong reveals a staggered approach, with the largest schemes and trustees expected to be fully onboarded through late 2025. Noteworthy milestones include:

• Major trustees such as Sun Life, HSBC, Hang Seng, Fidelity, and Manulife scheduled for onboarding in 4Q25.
• Estimated NAV onboarded in 4Q25: HK\$941.4 billion, representing 65.9% of total NAV.
• Onboarding of remaining major schemes continues into late 2025, indicating a ramp in revenue recognition in 2H25.

Peer Comparison: iFAST vs. Regional and Global Peers

ESG Commitment: Sustainability as a Competitive Advantage

iFAST has published sustainability reports since FY17, adhering to the Global Reporting Initiatives (GRI) standards. Its efforts focus on:

• People & Social Responsibilities
• Products and Services
• Corporate Governance & Regulatory Compliance
• Fintech & IT Development

The leadership’s proactive risk management across ESG and non-ESG spectrums is expected to enhance iFAST’s competitiveness and appeal to ESG-centric investors. No controversies related to ESG or governance have been reported.

Valuation and Analyst Rating

– Target price raised to S\$9.20 (DCF-based, WACC 9.7%), implying a 25x FY26F P/E, in line with the historical 5-year 12m-forward mean. – Current price: S\$8.17, offering a 12.6% potential upside. – Consensus: 6 Buy, 0 Hold, 0 Sell. – Major shareholders: Lim Chung Chun (15.2%), SPH Invest Ltd (15.1%), Lim Wee Kian (5.0%).

Conclusion: iFAST Positioned for Robust Growth

iFAST Corporation’s strategic execution in Hong Kong and continued expansion of its wealth management and digital banking businesses underpin its strong growth trajectory. With enhanced profitability, a healthy balance sheet, and a commitment to sustainable practices, iFAST is well-positioned to deliver value to shareholders and maintain its standing as a leading fintech-driven financial services provider in Asia. Investors are advised to monitor the company’s ongoing eMPF onboarding and watch for further upside as operational leverage improves and dividend policies evolve.