iFAST – awaiting positive operating leverage in 2H26
$IFAST(AIY.SI)$ shares have undergone a relentless sell-down over the past three days, tumbling 8.7% ahead of and post its latest earnings result published after-market on 24 July
Following this sell-down, Macquarie’s trending iFAST call warrant $iFast MB eCW261229(FSZW.SI)$ has fallen 37.5% over the past three days to close at SGD 0.035 yesterday
The call warrant has been seeing buying interest from investors during this period
📢iFAST’s second quarter 2026 (2Q26) profit of S$29.8 million was a 6% increase over the previous quarter but shy of Macquarie Research’s (MQ) S$32 million forecast
Its S$36.1 billion total wealth assets under administration however, was higher than forecast, while net revenues increased 35% from the previous year
The company also increased their dividend to 3 cents this quarter
✍While iFAST’s earnings are at the lower end of MQ’s expectations, MQ’s latest report published yesterday revealed a higher 12-month price target
Read more for the full article to understand why, as well as important disclaimers:
Key points
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iFAST's 2Q26 earnings were at the lower end of our expectations, due to lower near-term margins in the Hong Kong e-Pension segment.
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Following completion of all onboarding in Apr-26, the company confirmed peak headcount has passed, paving the way for positive operating leverage.
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MQ reiterates Outperform as pace of growth in wealth is strong. Price target increased around 9% to S$11.10
2Q26 was mixed, with strong wealth asset trends offset by weaker performance in Hong Kong e-Pensions. Total wealth Assets Under Administration (AUA) rose 11% quarter-on-quarter (QoQ) to S$36.1 billion and were higher than MQ’s S$34 billion estimate, driven by net inflows of S$1.3 billion and market performance.
Peak labour-force should mean gradual positive operating leverage ahead. Management noted e-Pension onboarding in Hong Kong was completed in Apr-2026, and peak headcount has passed. Reduction in costs will be due to labour contracts expiring (typical terms are 1–2 years) and national attrition, suggesting the absolute decline would be gradual.
Higher dividend guidance signals confidence in outlook. The company plans to lift its payout ratio in stages to 40% versus 25 to 30% currently. Still, MQ views the business more as a growth play, with 2028 expected dividend yield at 2.0%.
Earnings change
MQ reduces 2026-2027 earnings per share by 4-6% on account of higher near-term costs and lower e-Pension revenue contributions. MQ factors in a S$3 billion ORSO pension plan win in late-4Q26 (was 3Q26).
Valuation
MQ is rolling roll forward their valuation 6 months to mid-27e, leading to a 9% increase in their Sum-of-the-Parts based 12 month price target from S$10.20 to S$11.10; strong wealth AUA growth gives MQ confidence in the outlook.
Catalysts
Improved 3Q26 operating margins, further AUA growth. IFAST will attend Macquarie's ASEAN conference in Aug 19-20 in Singapore, including a panel discussing digital banking.
Note: Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.
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Investors interested in gaining a leveraged exposure to iFAST shares may wish to consider Macquarie’s only iFAST call warrant iFast MB eCW261229 (FSZW) that was newly listed on 20 July 2026.
Costing SGD 0.035 at close yesterday when iFAST shares traded at $8.73, FSZW has fallen 37.5% over the past five days/three trading sessions following iFAST’s 8.9% drop.
Conversely, should iFAST shares rebound from here, investors can expect FSZW to produce a magnified gain.
To simulate the performance of the warrant based on your short-term view of iFAST shares, investors can use the Exposure Simulator: https://warrants.com.sg/tools/exposuresimulator/FSZW
Here is a video explanation on how to use the Exposure Simulator: https://www.youtube.com/watch?v=uT6oleWgr00
Warrants can be traded on your brokerage account, just like shares, and come with no margin call risk. There is no iFAST put warrant available.
For further warrant queries, you can ring us at 6601 0289 or drop us an email at info@warrants.com.sg
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
