BILLION DOLLAR CLUB: BANKING & INVESTMENT SERVICES + INSURANCE
In 2021, iFast Corporation made the big leap from the Centurion Club to the Billion Dollar Club. A year later, for this year's BDC2022, iFast has retained its wins. It has been named the overall winner for the banking and investment services and insurance sector. In addition, iFast took two of the three category awards too: Best weighted ROE and best returns to shareholders. iFast achieved an ROE of 21.86% and returns to shareholders of 76.6%.
iFast Corp was incorporated in 2000 in Singapore and founded by executive chairman Lim Chung Chun. It started as an online unit trust distributor and has over the years expanded its suite of products and services. It now offers wealth management, brokerage, online discretionary portfolio management and various other related financial services. The company was listed on the mainboard in December 2014.
From just Singapore, the company has expanded to Hong Kong, Malaysia, China and India and built up its assets under administration base to $19 billion as at Dec 31, 2021. iFast claims to have built a “well-established” fintech ecosystem connecting its product providers and clients with a wide range of financial products and services.
As at the end of December 2021, iFast offers access to over 14,000 investment products. These include over 9,800 funds from over 280 fund houses and over 1,500 bonds, stocks and ETFs listed in Singapore, Hong Kong, the US, Malaysia and China.
Net inflows of client assets remained healthy in 4QFY2021 at $760 million, leading to net inflows of $3.75 billion for FY2021. As a result of the increasing AUA (assets under administration), iFast’s recurring net revenue continued to grow at a robust pace, increasing 35.6% y-o-y in FY2021.
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For FY2021 ended December 2021, the company grew its net revenue by 31.9% y-o-y to $113.22 million while earnings were up by a bigger 44.8% y-o-y to $30.63 million, reflecting the positive operating leverage of the group’s business model, with margin for profit before tax rising from 29.6% for FY2020 to 31.6% for FY2021. For FY2021, in line with the better earnings, the company paid out total dividends of 4.8 cents, versus 3.3 cents in FY2020.
Great Eastern, which delivered the most profit growth for the period under consideration, reported earnings of $1.113 billion for FY2021 ended December, up 16% over the preceding FY2020, thanks to more favourable financial market conditions compared to a year ago and higher operating profit from the insurance business. These numbers help give it a three-year CAGR of 14.5% for profit growth.
Great Eastern group CEO Khor Hock Seng ascribes the company’s achievement to its “unyielding commitment to transform our business against a backdrop of uncertainty brought about by unprecedented times. We have done well to strengthen our distribution network, arming our core channels of Agency/Financial Adviser and bancassurance with digital tools to build resiliency into the business”.
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The company warns that challenges will remain and come from the ever-evolving pandemic and geopolitical uncertainties. Nevertheless, its resilient performance underscores the strength of its core business fundamentals. “We will further build on these fundamentals to achieve a sustainable business for the long term,” says Khor.
CENTURION CLUB: BANKING & INVESTMENT SERVICES + INSURANCE
Low-profile Taiwan VC Hotung makes clean sweep
Led by chairman Huang Tsui Hui, Hotung has invested in more than 700 companies and over 200 have successfully been acquired / Photo: The Edge Singapore
Hotung Investment Holdings is a relatively low-profile name among investors here but some might recall its long history as a listed company on the local bourse. Since 1987, Hotung has invested in over 700 companies with a total value currently worth more than US$5 billion ($7.1 billion). After making it into the Centurion Club, Hotung should be better recognised here.
In three Centurion category awards this year, Hotung achieved a clean sweep, taking home the overall sector winner title too. It achieved a 9.5% CAGR for shareholders’ returns; 32.1% CAGR for profit growth and 8.53% for ROE in the three years under consideration.
The Taiwan-based firm, described as a leading venture capital investment management group, has been quoted on the Singapore Exchange since 1997, having been founded a decade earlier. Over its history,
Hotung, led by chairman Huang Tsui Hui, has invested in more than 700 companies and over 200 have successfully been acquired through M&A or listed on major stock exchanges of the world ranging from its home base in Taiwan to Hong Kong, the Nasdaq and New York.
The company says it is constantly investing in technology and innovation to meet the underlying needs of society aiming and improve general living standards, ranging from e-commerce, manufacturing, healthcare, biotech and agricultural innovations.
In recent years, Hotung has also taken stakes in companies possessing disruptive technologies such as Artificial Intelligence, internet of things, cloud services and much more.
Hotung’s investments go towards five key industry sectors. As at Dec 31, 2021, the industry sector with the most allocation was investments at 28.9%; followed by semiconductors at 16.3% and pharmaceuticals at 9.8%. The fourth and fifth largest investment sectors are software and automotive components at 7.6% and 5.9% respectively.
In the most recent FY2021 ended December, Hotung reported revenue of around NT$1 billion ($44.3 million), up 1.4% over the preceding FY2020 but earnings in the same period came in 19.7% y-o-y higher at NT$624.2 million ($30.5 million), led by fair value gains.
In FY2021, the company paid out a dividend of NT$5 per share, up from NT$$4.02484 paid for FY2020. In its earnings commentary, Hotung noted it has achieved a “remarkable” performance for FY2021 despite a difficult global economy.
For the current FY2022, “it remains uncertain how the global economy and financial markets, supply chain and chip production disruptions will impact valuations and realisations”. “We will remain cautious and continue to make new investments for the immediate and sustained performance of the group," the company adds.
