TERMS APPLY. OPINIONS ONLY.
iFast CEO and Malaysian national, Mr Lim CC, continued to mumble through on Monday, usually without providing clear/concrete answers, while the Group CFO Mr Terence Lin could not address the raised accounting issues, such as those related to accounts receivable worsening trends.
There is no clarification on why accounts receivable (AR) continued to grow at insane rates compared to much slower revenue growth, while the annual credit impairment remains at 0% (suggesting aggressive revenue recognition and/or potentially fake revenues?)
When and if will AR situation get better?
There is no explanation for why iFast counts the UK bank customer deposits as part of its wealth management AUA’s to create recurring revenues — is this even legal?
No profit or revenue guidance or any range has been provided for Hong Kong for 2026. We estimate an 80% drop in revenues for Hong Kong operations in 2026 compared to 2025, once the HK ePension project enters the maintenance phase.
There is no clarification on why iFast underreported its UK bank losses on SGX by around £9 million, compared to the Bank’s UK filings for both 2022 and 2023.
Reported bank losses on SGX filings: S$13.6 million SGD (~£8m GBP)
Reported bank losses in the UK filings: £17.57m GBP
No profitability guidance for the UK bank in 2025 has been provided by Lim CC, while the same Bank states in its UK filings that there will be no profits in the foreseeable future!
https://www.ifastgb.com/assets/static-file/investor-relations/iFAST%20Global%20Bank%20Ltd.%20Annual%20Report%202023.pdf
No further goodwill impairment has been recognized since S$4.85m, even though the Bank requires increasing equity and loan infusions from iFast while accumulating losses and showing no expected profitability.
We estimate an additional goodwill impairment of £19 million GBP as of June 2024, mainly due to underreported losses in 2022/2023 and further losses in H1 2024.
No free cash flow figures have been provided to investors, as iFast continues to inflate its operating cash flows by including UK bank customer deposits.
We estimate that iFast cannot generate enough operating cash flow (without UK bank customers’ money) to cover its annual capex of 20 million SGD and annual dividends of 15 million SGD. That’s why iFast is expected to continue raising more equity and issuing more bonds, increasing balance sheet stress.
While iFast provides ROE figures, it does not report return on assets (ROA) figures, even as iFast drastically increases its balance sheet leverage and indebtedness.
Since the end 2021 to Sep 2024, total liabilities have grown by staggering 1,203%, while shareholders equity has grown only by 130%.
Therefore, iFast balance sheet Leverage ratio (total assets divided by equity) has surged from 0.76 in 2021 to 4.31 as of Sep 2024 — a staggering 567% increase in leverage!
When a market correction occurs, iFast shareholders will be left holding the bag. TREAD LIGHTLY!
We invite the iFast audit committee and iFast auditors at KPMG to respond to our accounting questions to dispel doubts about iFast Corp.
https://sakuraresearch.com/wp-content/uploads/2024/10/Questions-SR_.pdf
By viewing material on this website you agree to the following Terms.
View and/or Use of Sakura Research materials is at your own risk.
THE RESEARCH REPORT EXPRESSES SOLELY OUR OPINIONS.
Opinions only.
SakuraResearch.com
medium.com/@SakuraResearch
Contact info {at} SakuraResearch {dot} com
https://x.com/sakuraresearch