2023 Last reporting season Part I: iFAST, FCT and MLT

Geo-political tension and high interest rate are not the best friends of businesses. Hence, I have tampered my expectation on current quarter of results. I would say that I am happy with what I am seeing this week from the following companies.

Growth Counter: iFAST
Income Counter: UOB
REITs: Frasers Centrepoint Trust, Mapletree Logistics Trust, Mapletree Industrial Trust

I am glad that all the above counters have webcast! The links are at the end of the post. If they do not work, just go to their IR page to locate them and listen. Nothing beats listening directly from the horse’s mouth.

I would highlight what caught my attention from the presentation and webcast. As I have yet to watch the webcast of UOB and MIT yet, I will write on the other three first.


It’s good to see iFAST back to where they were two years ago! Quarterly EPS of 2.88 cents is the second highest in their history, with the highest being 3.22 cents in 2021Q1. What is exciting is we can expect even better performance in the coming quarters!

What is really pleasing is not just the headline numbers. They have also proven their creditability as the Hong Kong ePension has started to contribute in this quarter. It shows that what their past projections for ePension and iFAST Global Bank are not empty talk but likely to come true. Of course it is still early days but it is a good start.

New things I learnt about iFAST from the webcast.

  • On and off, they have weigh the pro and con of doing a dual listing in HK Exchange. While it increases their visibility, it also means they need to deal with more non-business related administration. So for the moment, they are not going to do it.
  • iFAST Global Bank is gaining traction with deposit increase by 100% QoQ and they expect to break even in 2H FY2024.
    • For the moment, the deposit is placed at Bank of England and buying of investment grade bonds. So they earn a spread of about 1%.
    • Likely to go into lending in future. However, not to small corporate but for margin financing.
    • They are conservative and that can be seen from the regulatory ratios below.
  • Even though they will keep more cash due to banking business, there is scope to increase dividend from next year onwards as earning increases. The guide is between 33% to 50% of earning.

It’s exciting time ahead for iFAST and if they can execute well, then they would open up more opportunities.

Frasers Centrepoint Trust

While DPU dropped by 0.6% to $0.1215 compared to last year, it’s still the second highest in the history of the REIT. What CEO Richard shared makes lots of sense, this year’s DPU is higher than pre-covid level of $0.1207 in 2019 and this is achieved with the current high interest environment. In comparison, cost of debt was only 2.6% in 2019. So I definitely agree that it’s a good performance.

The outlook is still tough and cost of debt will still increase from current 3.8% to low 4% next year but the good news is that they are done with refinancing for FY2024. Not forgetting that their gearing would be brought down to 36.1%.

Also, while Tampines 1 AEI is scheduled to complete in 4Q FY2024, stage 1 will be done by end of this year, and first batch of shops will open in December 2023 onwards.

The key message that I get is that they are driving revenue to mitigate the increase in cost. I do think they can do it and hence should be able to sustain dividend next year.

Mapletree Logistics Trust

CEO Kiat was successful in driving her point through that the group divested properties not to increase the DPU. Not more than once, she said, divestment has always been the group’s strategy to rejuvenate the group’s properties!

Haha, I like her direct style and I do agree with her that MLT has always been divesting. I remembered many years ago, I struggled to see if they are growing organically as there was always divestment gain. It is only recently I start to understand their strategies and this webcast can’t make it clearer than that.

However, I do think (I did not check) that the amount of divestment is more than previous years. So besides rejuvenating their properties, I do think it’s a way to pare down their debt.

Besides China, rental reversion for other countries is strong. They continue to expect softer market in China but believe that the other 80% of their portfolio in other countries will help to prop up the overall return.

Kiat is again candid that geographical diversification works for them now but when China was booming, they did not get as much of a boost in the past. They are going to keep to this strategy as it also help them to have repeated customers in different geographical segments.

Not sure if she really meant it but it is definitely pleasing to the ear when she said that they are not interested to have the biggest AUM but the most up to date properties.

While cost of debt will be at 3% next year, I am confident that they can sustain their dividend going forward.


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Web Cast

Frasers Centrepoint Trust
Mapletree Logistics Trust
Mapletree Industrial Trust

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