iFast earnings outlook cut by DBS after 1Q19 results miss forecast

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DBS cuts its earnings forecasts for iFast Corp. after the wealth-management fintech platform’s first quarter results missed its estimates.

“Near term, market volatility will continue to affect iFAST, while its China operation is still expected to be loss-making,” DBS said in a note last week.

The bank cut its 2019-2020 earnings forecasts by 26-28 percent and lowered its target price to S$1.05 from S$1.19.

DBS said the first quarter results missed its expectations on a drop in front-end commissions for unit trusts and on higher costs.

iFast reported last week its first quarter net profit dropped 41.8 percent on-year to S$1.60 million amid weak financial markets.

The bank kept a Hold call on the stock.

“Longer term, iFAST has made significant progress in the last two to three years by broadening the range of investment products and services on its platforms and laying the infrastructure to kick-start its business in China, a market it believes will be key in the future,” DBS said.

DBS kept its forecast for assets under administration to grow 5 percent in 2019 and 2020, but noted it expected higher operating costs ahead.

It added it expected stronger growth from Malaysia ahead with the launch of the Shariah Discretionary Managed Portfolio in March and the retail bonds platform for B2C (business to consumer) and B2B (business to business) clients in April.

The stock ended Friday down 0.89 percent at S$1.11.

 

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