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iFAST Corp: Stellar 1H2025 Profit & Growth Surge · Investor Exchange

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  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
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  Welcome to the Deep Dive, where we get you the insights you need fast.
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  You know, in the financial world, things can change incredibly quickly.
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  Oh, absolutely. Especially for companies really pushing the envelope,
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  challenging those traditional services.
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  One minute they're planning, the next, boom, results are out.
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  Exactly. And that's what brings us here today, our mission for this Deep Dive.
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  We're digging into iFastCore's latest numbers first half of 2025.
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  We want to figure out what's driving their performance, why it matters,
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  and what might be coming next.
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  So this is for you, whether you're an investor prepping for a meeting or just curious.
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  Okay, so let's jump straight to the headlines then.
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  IFastCore's net profit surged 34.7% year-on-year for the first half.
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  That's S, $41.15 million.
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  Wow, okay. And Q2 alone was even stronger, up 37.9%. Gross revenue saw big jumps
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  too, up 28.3% in Q2, and 26.4% for the first half overall.
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  Those are definitely strong figures,
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  really robust. It suggests something powerful is going on underneath.
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  It does. So beyond just the percentages, what would you say are the main engines
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  behind this profitability boost for iFast?
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  Well, it's not just one thing, which is interesting. It looks like a multi-pronged
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  success story. You've got three main drivers kicking in.
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  First, their Hong Kong pension business. That's been a really significant factor.
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  Second, IFAS Global Bank turned around back into profitability.
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  That's a big ship. Okay, the bank turnaround.
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  Got it. And third, just the continued solid growth of their core wealth management
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  platform. So it's strength across the board, really.
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  So diversified success, not relying on just one area. That sounds pretty resilient.
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  Exactly. I also noticed their return on equity, the ROE for H1 2025,
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  was 24.6%. That seems quite healthy. Very healthy, yes.
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  And they're proposing a dividend increase for Q2.
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  33.3% year on year to two cents per share.
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  That's right. And they're signaling expectations for the full year dividend
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  to be up at least 35.6% compared to last year.
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  So potentially eight cents or even higher.
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  So when you see that combination, a high ROE like that and rising dividends,
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  what does that signal for you thinking about how they manage capital?
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  It signals a really strong and efficient use of capital.
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  That 24.6% ROE means they're generating good profits from shareholder investments.
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  And boosting the dividends so significantly suggests management is confident they can keep this up.
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  They feel they can both reinvest for growth and give more back to shareholders.
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  It speaks volumes about their financial health. Understood.
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  Okay, let's dig into that core wealth management platform then.
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  Their assets under administration, AUA, hit a new record. A new record high,
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  yeah. S27.2 million dollars.
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  That's up a significant 21.6 percent year on year. And the inflows.
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  Are people still putting money onto the platform? Record inflows, too.
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  S1.29 billion dollars just in Q2 and S2.23 billion dollars for the first half of the year.
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  So, yes, a lot of fresh capital coming in. That's substantial.
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  It is. And it links to their customer base, too. They now have over one million
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  customer accounts as of the end of June. Wow. OK. Provides a solid base.
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  Definitely. And it flows through to their revenue. It's useful here to look
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  at their net revenue in two parts.
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  Recurring and non-recurring. Okay, why is that distinction important for IFAST?
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  Because the vast majority, almost 90%, 89.3% in H1 2025 of their non-banking
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  net revenue comes from recurring sources.
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  Meaning things like trailer fees, platform fees, wrap fees, portfolio management fees.
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  Basically fees linked directly to that growing AUA. Ah, okay.
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  So it's stable, predictable income tied to the assets they manage. Exactly.
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  That high percentage points to a very stable income base, which is a huge plus in financial services.
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  Now, higher AUA boosted this, obviously, though there was a slight drag from
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  lower interest commission income from client assets.
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  Got it. And the other slice, the non-recurring revenue. That grew nicely,
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  too, even though it's smaller. This is more transaction-based stuff. Do what?
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  Upfront fees, prospects used
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  for stock trades or bonds, currency conversion fees, things like that.
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  The growth there shows people are actively using the platform,
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  trading, investing, it complements the stable base.
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  So a reliable core income stream plus growing activity on top sounds like a
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  good model. It's a strong combination.
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  How did this play out geographically within wealth management?
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  Let's start with, say, Singapore.
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  Singapore saw strong AUA growth up nearly 20% year-on-year to $17.21 billion.
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  And that flowed through to profit. Yep. Net revenue up 9.6% in H1.
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  I feel now. And profit up 12.8%. mainly driven by portfolio management services
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  and just higher transaction volumes generally.
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  Solid performance in their home market. Okay. And Malaysia looked particularly
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  strong in the report. Absolutely. Malaysia was quite impressive.
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  Profit jumped 59% year-on-year in the first half.
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  59%. Wow. Yeah. Fueled by AUA growth of about 16%, hitting S3 billion dollars,
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  and just broad increases in investment activity.
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  Shows their regional strategies really paying off there. And China.
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  That's often a tougher market. It can be. But IFAST actually managed to cut
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  their losses there significantly down about 45% year-on-year in H1. That's a positive sign.
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  It is. And their AUA in China grew strongly, too, up nearly 28% year-on-year to almost $500 million.
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  It suggests maybe market conditions are improving and their efforts there are starting to work.
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  Reducing losses is key. Definitely. OK, so solid regional performance.
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  Now, let's talk about that Hong Kong pension business. That seems like a major
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  strategic win. Oh, it's been huge for them.
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  Really transformative, I'd say. How so? Look at the Hong Kong numbers.
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  Gross revenue for the HK business shot up 33.4% year-on-year in Q2,
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  hitting S45.6 million dollars. and profit before tax was up nearly 18% of $15.7 million.
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  And that's largely the pension effect. A very significant part of it, yes.
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  It's driving growth in their overall Hong Kong wealth management business and
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  it's just a major positive contributor to the whole group now.
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  And the final piece of this positive picture seems to be the bank.
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  IFAST Global Bank. Turning that from a loss maker to profit,
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  that's quite a story. It really is an impressive pivot.
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  The bank made a net profit of $0.7 million in Q2 this year.
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  Compared to an S1.56 million dollar loss in Q2 last year, and for the first
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  half of 2025, it's S1.7 million dollars in profit versus a S3.85 million dollar
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  loss in the first half of 2024.
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  That's a dramatic swing. It absolutely is. It really signals they're on a path
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  to sustain profitability there, validating that whole bank acquisition and investment.
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  So what actually changed? What levers did they pull to make that turnaround
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  happen so, well, quickly?
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  Well, a few things came together. Gross revenue for the bank was up massively
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  85.4% year-on-year in Q2. Wow.
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  And crucially, customer deposits soared, up 124% year-on-year.
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  They now hold S1.45 billion dollars in deposits.
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  Okay, so more deposits mean more interest income. Exactly. That drove healthy
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  growth in net interest revenue.
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  But it wasn't just that. They also saw strong non-interest income fees and commissions,
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  especially from their Ezra Met Remittance division.
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  So they're getting revenue from different parts of the bank's operations.
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  That explosive deposit growth is something. How are they managing the risk side of that?
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  And the capital? That's a really important question. They seem to be taking
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  a very conservative approach.
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  They're holding most of those client deposits either as cash with central banks
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  or in very safe, short-duration government or investment-grade bonds. So minimizing risk.
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  Pretty much. Low risk while still earning some interest.
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  And the regulatory capital ratios are, frankly, stellar.
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  Liquidity coverage ratio, LCR, at 655%. Net stable funding ratio,
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  NSFR, at 210%. total capital ratio at 24%. And those are well above the minimums.
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  Way above minimum requirements.
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  It signals really strong financial stability, plenty of buffer.
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  They have a solid foundation for the bank's growth.
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  Okay, so the growth story is clear and it seems well-managed,
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  but growth costs money, right? Their operating expenses were up, what was it?
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  28.8% year-on-year in Q2. That's right.
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  How should we think about that increase? Is it just the cost of this expansion?
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  I think it's really important to frame that as investment, not just cost.
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  Okay. Investment in what?
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  Well, the key drivers were things like continuously upgrading the wealth management platform,
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  expanding the Hong Kong pension division, which means more offices,
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  more staff, so higher depreciation and payroll, and significant investment in
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  their own IT software, building out those fintech capabilities. Makes sense.
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  There was also a bit of an impact from negative foreign exchange movements.
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  But overall, these are expenses designed to support future growth.
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  Scale, and efficiency. Okay.
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  They seem like necessary strategic outlays that are actually generating returns.
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  Right. Costs incurred to fuel the growth we've been discussing.
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  And does the overall balance sheet look strong enough to support this kind of
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  investment? Very strong.
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  They ended Q2 with over $820 million.
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  That's $821.84 million. To be precise, in cash and cash equivalents. That's a lot of cash.
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  It reflects both the bank's conservative strategy and the cash generation from
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  the wealth management side.
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  Plus, remember they did that successful S-100 million dollar bond issue back in June 2024?
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  Ah, yes, the IFAS bond. How's that doing? It seems to be performing well.
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  The bid yield was around 2.9% in late July 2025.
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  That was really a strategic move for them, diversifying their funding,
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  reducing reliance maybe on just equity, potentially enhancing shareholder returns over time.
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  And cash flow from actual operations. Also looking very strong.
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  Net cash from operations jumped significantly in the first half,
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  hitting us $451 million.
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  That was mainly driven by all those deposits coming into the UK bank.
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  So what this means for you listening in is that IFAST seems to have a really
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  solid financial base. Exactly.
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  It gives them flexibility. Flexibility for more growth, maybe strategic acquisitions
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  down the line, or like we saw continuing to increase those dividends, it gives them options.
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  A very solid foundation then. Okay, so looking forward, what's the outlook?
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  What are they telling us about the rest of 2025 and beyond?
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  For the near term, the second half of 2025, they expect a healthy improvement
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  in revenue and profit compared to the first half we just discussed.
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  Okay, continued momentum. Yes.
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  And they're sticking to their forecast for robust growth rates for the full
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  year 2025 compared to 2024 in both revenue and profitability.
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  So confidence remains high. And what are the key things that will drive that
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  expected growth? It's largely building on the current strengths.
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  The e-pension division in Hong
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  Kong is expected to keep improving as more clients get onboarded. Right.
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  The EMPF transition. Yeah, exactly. And then they anticipate continued growth
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  from the core wealth management business and, of course, from IFAS Global Bank
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  maintaining its positive trajectory.
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  And longer term, how do they see things shaping up? Longer term,
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  the idea is that this mixed fee income from wealth management,
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  net interest income from the bank combined with careful capital management,
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  should support healthy ROE levels consistently.
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  That makes sense. Now, one thing that caught my eye was their mention of investing
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  in artificial intelligence, AI.
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  How does that fit into the picture? Is it just a buzzword or is there substance there?
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  It seems like a serious strategic layer. They actually set up AI innovation
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  centers in Singapore and Malaysia late last year.
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  Okay. Doing what? They have an AI team actively building AI applications.
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  And it sounds quite practical. For example, they mentioned AI is already handling
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  about 60% of their live chat customer queries.
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  60%? That's quite high. It is.
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  They're also using it for things like breaking down language barriers,
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  processing documents more efficiently, language translation, Thank you.
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  Boosting operational efficiency across the board. So it's not just a flashy
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  front-end thing. It's about improving the engine room and the customer experience.
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  Precisely. They actually said they're aiming not just to build another digital
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  bank, but an intelligent one. An intelligent bank. Yeah.
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  The goal, they say, is to anticipate customer needs, offer more personalized
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  services, and create what they called a loyalty-building experience.
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  Hmm. That's interesting. It really makes you wonder, doesn't it?
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  For you listening, as AI gets woven more deeply into finance,
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  How is that going to change your experience with your bank or investment platform?
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  It's a big question. Definitely something to think about.
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  Okay, so let's quickly recap this deep dive on IFAST Corp. We've seen really strong H1 2025 results.
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  Driven by that diversified model, the Hong Kong pension, the bank's impressive
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  turnaround, and solid core wealth management growth.
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  All backed by strategic investments, careful financial management.
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  And a clear vision for the future, including that intriguing AI strategy,
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  they really seem to have built a strong foundation.
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  Agreed. The progress is clear and the strategy seems well thought out.
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  Those investments are certainly showing returns now. Yeah, creating value and
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  a platform for what comes next.
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  So the final thought to leave you with, as finance keeps evolving so fast,
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  how will that blend of traditional financial know-how and this cutting-edge
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  AI reshape the way you manage your money and interact with financial institutions
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  maybe even sooner than you think? Food for thought. Definitely.
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  We encourage you to keep pondering that and continue your own deep dive into
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  this fascinating space.