The share price of iFAST has exploded upwards this week after the company was included in the MSCI Singapore small cap index. Fund managers are buying. Retail shareholders are selling. One of the iFAST directors even sold some shares last Friday.
Is iFAST still a buy now?
Here’s a scenario where iFAST can still be a multi-bagger even at current levels.
iFAST has a vision of achieving SGD100 billion assets under administration by 2028. In 2028, iFAST hits this SGD100 billion AUA target and achieves SGD595 million net revenue based on its existing 0.6% take rate.
Earnings per share reaches SGD1.1 based on the pretax margins of mature peers such as Hargreaves Lansdown. Investment platforms such as iFAST tend to grow earnings exponentially once they reach scale because of their fixed costs and limited variable costs. I’ve assumed a 55x trailing PE which leads to a SGD63 share price because of its growth profile and presence in growing Asian wealth management...