3 Key Takeaways From iFast Corporation’s AGM

iFast Corporation Ltd held its 2018 Annual General Meeting (AGM) in Carlton Hotel this Wednesday. The event was attended by more than a hundred of investors. Both iFast Corporation Ltd CEO, Mr. Lim and CFO Mr. Leung spent more than 4 hours talking to shareholders about the company’s current status and future prospect.

iFast Corp is a financial company focusing on providing the technical tools for both individual and institutions to manage their investing and financial needs.

We are invited to cover the event and here are 3 key takeaways from the AGM.

Singapore Is Still The Bread And Butter

iFast Corp has presences in Singapore, Malaysia, Hong Kong, China and India (through its associate). All three main markets, Singapore, Malaysia and Hong Kong, are already generating profits for the company. However, Singapore continues to be the strongest market for iFast Corp, generating close to SGD12 million in profit in FY2017. That is 6.5 times and 11.1 times more than its profits for its Hong Kong and Malaysia operations respectively.

Its China operation is still loss-making as its enter its second year of operation. Management is expecting its China operation to breakeven in the next few years.

The Industry Is Changing And iFast Corp Is Well Positioned To Adapt To That Change

iFAst Corp CEO, Mr. Lim spent his time to explain that he is seeing two major shift in the financial industry. He believed that the insurance, fund management and brokerage business are converging. He sees that only by having a complete solution can a financial firm truly served the needs of the consumers. That is why he sees that iFast Corp is well positioned to provide these tools and platforms for both individual investors and financial firms to manage wealth in a holistic approach.

He also talked about how the financial industry is becoming borderless. In the past, each country would have separate financial regulations and products for its people. However, in the future, investors should be able to buy any financial products in any market, mainly due to the power of the internet. iFast Corp, which started out as an internet-enabled business, has the capability to scale up as regulation relaxed in the markets it is operating in.

Investors Are Worried About China, Very Worried

Most of the questions asked by shareholders are surrounded by the topic of China. Investors want to know how iFast Corp is able to compete in a market so competitive as China. They want to know how long would the company need to at least breakeven its operation in China.

iFast Corp’s management talked about its current markets taking about 5 to 6 years of expansion before reaching breakeven points. Thus, management is expecting a similar time period for its China business to break even.

Secondly, because of the extremely strong player in the B2C segment of business in China, with the likes of Ant Financial (Alipay) and WeChat Pay, iFast Corp has chosen to focus only in the B2B segment. That is done by providing the platform tools to financial firms and also individual financial advisors that helped consumers manage their wealth. By focusing on that, iFast Corp believed that it is a much better position to find a niche within that space where it can become profitable.

In Summary

iFast Corporation is an interesting company. It is a Fintech company even before Fintech is even a word! Its business has proven to be successful and profitable in three markets. However, the company is still predominately a Singapore business with the majority of its profit coming from its home country.

There is still huge risk associated with growing its China business and the losses might continue to drag on for a few years. However, if successful, iFast Corp could indeed become a regional player and grow at a much faster pace than it has ever been.

On the flip side, if it fails in China, the company might suffer some losses from its investment but given the strong balance sheet of the company, it does not seem to be a risk that would destroy the company. But if that happens, it would mean iFast Corp would just be a local financial firm, with very limited prospects.

iFast Corp is working hard toward building itself into a regional player, although it is too early to know if it will be successful but the potential is definitively there.

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Stanley Lim, CFA

Stanley Lim has spent the last decade in the investment industry. Over the course of his career, he has kick-started a few businesses, worked in the family office industry and most recently in the investment advisory industry. He has been a writer and analyst for The Motley Fool Singapore from 2013 to 2017. He has written close to 2000 articles online, on investment education and market analysis. He is the co-writer of the investment book: “Value Investing In Asia”, published in 2018. Stanley is currently the chief editor of Value Invest Asia.

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