31 October 2019 3Q2019 & 9M2019 Results Presentation iFAST Corporation Ltd.
Disclaimer This presentation should be read as an overview of iFAST Corporation Ltd.’s ("iFAST Corp“ or the “Company”, and together with its subsidiaries, the “Group”) current business activities and operating environment. This presentation should not be solely relied upon by current and potential investors when making an investment decision. iFAST Corp accepts no liability whatsoever with respect to the use of the content in this presentation. This presentation may contain forward-looking statements that involve risks. Future performance, outcomes and results may differ from those expressed in forward-looking statements as a result of risks. Investors should therefore not rely on these forward-looking statements, which are based on the current view of management of future events and market developments. This presentation should not be construed as financial or investment advice and investors should consult their independent advisers. This presentation does not constitute an offer or solicitation of an offer to subscribe for, acquire, purchase, dispose of or sell any units in iFAST Corp. iFAST Corporation Ltd. 2
Table of Contents Key Summary Pg. 4 3Q2019 (Jul – Sep 2019) and 9M2019 (Jul – Sep 2019) Results Pg. 7 Section I Financial Indicators Financial Results Financial Position Third Interim Dividend Section II The iFAST Fintech Ecosystem Pg. 24 Strengthening Our The Revenue Drivers Fintech Ecosystem Pursuing A Digital Banking Licence in Singapore AUA Breakdown: Markets & Products Pg. 32 Net Sales and Subscription excluding Switching Section III Recurring Net Revenue, Non-recurring Net Revenue & Operating Our Performance Expenses Trends Performance by Geographical and Business Segments Progress of Individual Markets Business Overview & Milestones Pg. 50 Section IV Licences Held and Products/Services Available Appendices iFAST Fintech Footprint: Past, Present and Vision 2028 iFAST Fintech Solutions iFAST Corporation Ltd.
Key Summary • Despite volatile financial market conditions and generally jittery investor sentiments in Asia in 9M2019 , the Group’s Assets under Administration (AUA) grew 17.3% year- to-date, to a record high of S$9.44 billion as at 30 September 2019. • Record AUAs have been achieved in Singapore, Hong Kong and Malaysia, as the Group’s businesses have benefited from its continuous efforts in improving the range and depths of its products and services. • The Group’s net revenue has also continued to grow, hitting a new record high of S$16.85 million in 3Q2019. While net revenue has been growing healthily, there was a YoY decline in the Group’s net profit that narrowed to 5.5% in 3Q2019. This resulted from the fact that in the last few years, we have been stepping up investments into our platform capabilities, particularly in our IT capabilities. • In the last three years, the Group’s AUA has increased 57.3% from S$6.00 billion as at 30 September 2016 to S$9.44 billion as at 30 September 2019. The Group’s net revenue has also grown by 57.8% from S$10.68 million in 3Q2016 to S$16.85 million in 3Q2019. The Group’s net profit, however, has not been very strong in the last few years, resulting from the fact that the Group has prioritised its efforts in ensuring that its platform capabilities will be more comprehensive. iFAST Corporation Ltd. 4
Key Summary • While the Group is expected to continue to improve on upgrading its platform capabilities further, including laying the initial foundations to be a digital/virtual bank, the Group expects that over the next 12 months, the pace at which the Group’s operating expenses will be increasing will moderate. This is because a large part of the key infrastructure that is required for an integrated wealth management platform is already in place. • Based on current estimates, the Group is estimating that its operating expenses will increase by approximately 5% to 9% YoY and amount to approximately S$59.9 million to S$62.1 million in 2020. The estimated percentage increase will be significantly lower than the double digit percentage YoY increases in operating expenses that the Group has been seeing in the last few years. This, however, does not take into account the planned application for the digital banking licence in Singapore, which may affect expenses starting the second half of 2020 if the application is successful. • Overall , the Group believes that growth opportunities in Asia’s wealth management industry remains very substantial, and it is well-positioned to benefit from these opportunities in the medium to long term. Continuing growth in the Group’s AUA and net revenue, combined with a moderation in the pace of increase in operating expenses, will allow the Group to better see the benefits of its scalable business model. • For the third interim dividend for 3Q2019, the Directors declared a dividend of 0.75 cents per ordinary share (third interim dividend for 3Q2018: 0.75 cents per ordinary share) iFAST Corporation Ltd. 5
Group AUA grew 17.3% YTD to a record high of S$9.44 billion AUA (as at 30 Sep 2019): S$9.44 billion 1 S$ million $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 B2B B2C Note: 1. The Group’s AUA as at 30 Sep 2019 includes its effective 33.3% share of the India Business iFAST Corporation Ltd. 6
SECTION I Financial Results iFAST Corporation Ltd. 7
Presentation of Group’s Results Presentation of Group’s results (including and excluding China) • In view that our China operation is a relatively new market for the Group, we are presenting our presentation results based on the results of: 1) Group excluding China operation; and 2) Group including China operation • By adopting such a structure in the presentation, investors are able to better assess the performance of the Group in our core operations in Singapore, Hong Kong and Malaysia, with and without the impact from our newer China operation. iFAST Corporation Ltd. 8
Financial Results for Group (excluding China operation) (3Q2019 vs 3Q2018) S$ (Million) 3Q2018 3Q2019 YoY change (%) Revenue 31.23 33.62 +7.7 Net revenue 15.32 16.71 +9.1 Other income 0.34 0.44 +28.8 Expenses 11.35 13.06 +15.0 Net finance income 0.22 0.05 -77.7 Share of results of associates, net of tax -0.02 0.09 NM Profit before tax 4.49 4.21 -6.3 Profit after tax 3.88 3.69 -5.0 Net profit attributable to owners of the Company 3.88 3.69 -5.0 EPS (cents) 1.46 1.38 -5.5 iFAST Corporation Ltd. 9
Financial Results for Group (including China operation) (3Q2019 vs 3Q2018) S$ (Million) 3Q2018 3Q2019 YoY change (%) Revenue 31.38 33.77 +7.6 Net revenue 15.47 16.85 +9.0 Other income 0.34 0.44 +29.1 Expenses 12.86 14.47 +12.5 Net finance income 0.23 0.03 -88.4 Share of results of associates, net of tax -0.02 0.09 NM Profit before tax 3.16 2.93 -7.1 Profit after tax 2.54 2.41 -5.2 Net profit attributable to owners of the Company 2.60 2.46 -5.5 EPS (cents) 0.98 0.92 -6.1 Dividend Per Share (cents) 0.75 0.75 - iFAST Corporation Ltd. 10
Financial Results for Group (excluding China operation) (9M2019 vs 9M2018) S$ (Million) 9M2018 9M2019 YoY change (%) Revenue 92.67 91.20 -1.6 Net revenue 44.21 47.85 +8.2 Other income 0.90 1.52 +69.3 Expenses 32.44 37.64 +16.0 Net finance income/(cost) 0.68 -0.10 NM Share of results of associates, net of tax -0.11 -0.16 +46.8 Profit before tax 13.19 11.42 -13.4 Profit after tax 11.77 10.09 -14.2 Net profit attributable to owners of the Company 11.77 10.09 -14.2 EPS (cents) 4.43 3.77 -14.9 iFAST Corporation Ltd. 11
Financial Results for Group (including China operation) (9M2019 vs 9M2018) S$ (Million) 9M2018 9M2019 YoY change (%) Revenue 93.26 91.59 -1.8 Net revenue 44.80 48.24 +7.7 Other income 0.90 1.52 +69.4 Expenses 36.76 41.83 +13.8 Net finance income/(cost) 0.71 -0.11 NM Share of results of associates, net of tax -0.11 -0.16 +46.8 Profit before tax 9.54 7.67 -19.6 Profit after tax 8.12 6.35 -21.8 Net profit attributable to owners of the Company 8.29 6.51 -21.4 EPS (cents) 3.12 2.43 -22.1 Dividend Per Share (cents) 2.25 2.25 - iFAST Corporation Ltd. 12
Results Overview for Group (excluding China operation) FY2017 1 S$ (Million) FY2015 FY2016 FY2018 9M2019 Revenue 85.34 79.89 100.65 120.50 91.20 Net revenue 41.53 40.46 49.01 58.87 47.85 Other income 1.53 1.88 1.10 1.16 1.52 Operating expenses 30.06 33.13 37.31 44.12 37.64 Net finance income/(cost) 0.75 0.82 0.72 0.79 -0.10 Share of results of associates, net of tax -0.02 -0.16 -0.33 0.52 -0.16 Profit before tax 13.73 9.82 13.13 17.17 11.42 Profit after tax 13.08 9.06 11.87 15.51 10.09 Net profit attributable to owners of the 13.08 9.06 11.87 15.51 10.09 Company EPS (cents) 5.03 3.46 4.50 5.83 3.77 Operating Cashflows 15.43 8.79 16.92 21.62 20.13 Note: 1. Restated as a result of adoption of SFRS(I)s with effect from 1 January 2018 iFAST Corporation Ltd. 13
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