For the first time since its listing, iFAST provided guidance for operating expenses during the third quarter of 2019.

3Q19 net revenue grew 9% but net profit fell 5% because of increased spending on the company’s IT capabilities. More importantly, iFAST is guiding for slower expense growth in 2020. Overall operating expenses are expected to grow 5-9% year on year to SGD60-62 million in 2020 which is lower than the double digit percentage growth during the last few years.

iFAST PBT margins

2016: 15.0%

2017: 17.7%

2018: 20.7%

9M2019: 15.9%

If all goes well and iFAST grows revenue faster than 9% per year in 2020, profit margins should start growing again.

Assets under administration (AUA) and valuation

Despite volatile markets, AUA grew 4% sequentially and 17% year on year to a record SGD9.4 billion. Growing AUA is crucial because the iFAST platform will become more attractive for clients and distributors.