ANALYSTS have raised their targets on iFast Corporation, with DBS Group Research upgrading the fintech platform to “hold” from “fully valued”.

DBS raised its target price by 77.3 per cent to S$6.95 from S$3.92, while UOB Kay Hian (UOBKH) increased its target by 36.4 per cent to S$6.56 from S$4.81.

Their moves came after iFast posted an improvement in its operating metrics. Its third-quarter results released on Wednesday (Oct 25) also beat DBS’s expectations, although it missed UOBKH’s.

iFast posted a Q3 net profit of S$8.5 million, up from S$2.1 million in the corresponding year-ago period. Revenue rose 19.2 per cent to S$62.2 million from S$52.2 million, thanks to the diversified suite of offerings.

iFast is the prime subcontractor for PCCW Solutions, which won the tender for Hong Kong’s electronic Mandatory Provident Fund (eMPF) platform in 2021.

“With the eMPF project starting to contribute revenue alongside the improving margin trend, we believe that iFast is on track to achieve operating leverage, given its scalable business model,” said DBS analyst Ling Lee Keng.

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However, the group could still see higher costs ahead as the initiative is still in its infancy.

The same can be said for iFast’s Occupational Retirement Schemes Ordinance (Orso) project – an e-pension service – launched in June this year. However, costs are not expected to be as high as it is able to leverage existing platforms with some customisations.

DBS raised its earnings estimates for FY2023 by 44 per cent and 4 per cent for FY2024 on higher margin assumptions. It also estimated a higher terminal growth rate of 5 per cent from 3 per cent previously.

In contrast, UOBKH trimmed its FY2023 earnings forecasts by 13.8 per cent after accounting for lower-than-expected contributions from the eMPF project and Orso ePension services.

Its FY2024 and FY2025 estimates remain unchanged. UOBKH believes iFast’s revenue and profit will “grow more substantially” during these financial years on contributions from the eMPF project. It also expects the Orso project to contribute to the group’s assets under administration from Q1 2025.

iFast’s shares were trading 2.6 per cent or S$0.16 higher at S$6.29 as at 4.47 pm on Friday.