DBS lifts iFast target price on Asia’s rising wealth; ‘buy’ call intact

DBS Hikes iFast’s Target Price to S$10.88 on Rising Wealth, Expanding Wealth Management Platform

Key Growth Driver: ePension Division

DBS Group Research has hiked iFast’s target price to S$10.88 from S$10.23, while reiterating its "buy" call, driven by Asia’s rising wealth and the company’s expanding wealth management platform and product suite. The company’s ePension division, described as its key growth driver for 2025 and 2026, is progressing well, according to the research house.

Record-High Assets Under Administration

iFast’s core wealth management platform is steadily advancing with record-high assets under administration (AUA) of S$25 billion, up 26.2 per cent year on year (yoy) as at end-2024. The company’s net margin continued to improve, said analyst Ling Lee Keng.

High AUA Target of S$100 Billion by 2028 to 2030

iFast set a "high" AUA target of S$100 billion by 2028 to 2030, and DBS has assumed conservative long-term growth of 20 per cent. However, achieving the goal will likely require inorganic growth drivers such as mergers and acquisitions, said the analyst.

Significant Value Creation Potential

Ling added that iFast Global Bank’s potential for value creation was "significant". She noted that a fully integrated ecosystem combining iFast and the digital bank offers considerable synergistic benefits, promising faster growth, reduced costs, streamlined operations, expanded reach, and enhanced profitability.

Market Share and Barriers to Entry

The company’s dominant market share in Singapore of around 60 per cent – up from 50 per cent several years ago – highlights significant barriers to entry, especially when the past decade saw only three competitors, noted the report. This makes it challenging for new entrants to gain a foothold in the market.

Financial Performance

IFast Global Bank’s robust growth potential was demonstrated through two key developments: achieving profitability within three years upon acquisition and improving metrics. Customer deposits surpassed S$1 billion by end-2024, reflecting a 182.6 per cent increase yoy. In Q4 2024, gross revenue grew 163.7 per cent to S$17.2 million, while net revenue climbed 136.4 per cent to S$7.7 million.

Conclusion

In conclusion, DBS’ positive outlook on iFast is driven by the company’s expanding wealth management platform, increasing AUA, and its potential for value creation. With a dominant market share in Singapore and a scalable digital bank model, iFast is well-positioned for long-term growth and profitability.

Frequently Asked Questions

Q: What is the new target price for iFast?
A: The new target price is S$10.88.

Q: What is the key growth driver for iFast?
A: The key growth driver is the ePension division, which is progressing well and expected to continue to drive growth in 2025 and 2026.

Q: What is the company’s AUA target by 2028 to 2030?
A: The company has set a "high" AUA target of S$100 billion by 2028 to 2030.

Q: What is the potential for value creation at iFast Global Bank?
A: The potential for value creation is significant, with a fully integrated ecosystem offering considerable synergistic benefits.