iFAST

iFAST: Trading debut at 9am for the internet-based investment products distribution platform, parent company of Fundsupermart.com and iFAST Financial platforms. Its IPO of 32.8m new shares (30m placement shares, 2.8m public offer shares), at the upper end of the IPO price of $0.95/share, were 12.4x subscribed. Institutional investors allotted over 5% include Schroder Investment, Affin Hwang Asset Management and Lion Global, while cornerstone investors are FIL Investment Management and OWW Capital Partners. Proceeds from the IPO will be earmarked for M&As, JVs and business expansion into the Chinese market, as well as to enhance its product, IT and service capabilities, and working capital. The financial technology firm distributes investments products to consumers and businesses via its platforms, with operations in Singapore, Hong Kong, Malaysia, and its newest addition, China. The firm also provides investment administration and transactions services, research and trainings, IT services and backroom functions to financial companies and investors. Key revenue drivers are: 1) Recurring commission income drawn as a percentage of assets under administration ($5.13b as at end-Sep); 2) Non-recurring commission derived from investment subscription via front-end loading or processing fees; and 3) Non-recurring B2C currency conversion service and advertising fees. Growth is highly dependent on offering of innovative advisory solutions and the rising trend of back-end transactional and operational outsourcing. The group has a lean balance sheet, with no borrowings, high operating leverage, and 80% recurring revenue. Based on the offer price, iFAST trades at 24x annualized 9M14 P/E, compared to closest peer, ARA Asset Management, which provides similar services for property assets, of 16.1x.