iFast Corporation: Refuting Short-Seller Claims

iFast Corporation:

1. Refuting Short-Seller Claims: iFast Corporation has denied claims made in a short-seller report by Sakura Research, which questioned the sustainability of iFast’s Hong Kong ePension division’s revenue, the health of its UK digital bank, and its overall profitability.
2. Sustained Revenue from ePension Division: iFast asserts that its ePension division in Hong Kong will maintain revenue over a seven-year contract period, despite the short-seller’s prediction of a significant revenue drop after the project’s full implementation in 2025.
3. Industry Analyst Support: CGS International analyst Andrea Choong and UOB Kay Hian analyst Heidi Mo refuted Sakura Research’s claims, highlighting iFast’s solid financial position and growth prospects, particularly with the upcoming onboarding of additional trustees to the ePension project.
4. UK Digital Bank Prospects: iFast’s UK digital bank, iFast Global Bank, aims to break even by Q4 2024. Comparisons made by Sakura Research between iFast Global Bank and other digital banks like GXS Bank were deemed unfair by analysts, who noted iFast’s focus on a broader customer base and revenue from loans.
5. Improved Profitability Metrics: iFast’s profit before tax for the latest half-year stood at S$37.9 million, with a ratio of operating profit to assets under administration (AUA) improving to 0.169%, up from 0.047% in 2023. The decline in 2022 was attributed to impairments and higher operating expenses related to new projects.
6. Stock Impact: Since the release of the short-seller report on Aug 19, iFast’s shares have fallen by 3% to S$7.07 as of Aug 30, with a year-to-date decline of 13.9%.

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