In a shocking turn of events, iFast, a prominent investment platform, witnessed its shares plummet by 12% on Monday morning following a significant cut to its profit expectations for its Hong Kong operations.

As of noon, the stock had fallen by S$0.87, settling at S$6.32.

The Singapore-based firm revised its profit before tax target for Hong Kong in 2025 down to HK$380 million (around S$64.3 million), a decrease from the previous guidance of HK$500 million, revealed during their recent earnings report on April 25.

Despite this setback, iFast reported a remarkable net profit increase of 31.2% year-on-year for the first quarter ended March 31, reaching S$19 million. This surge was largely attributed to a 24.4% increase in revenue, translating to S$106.9 million, thanks to a recovery in its UK banking operations and continued success in their core wealth management services.

However, the positive headline figures came with a caveat. DBS noted that iFast's Q1 results fell slightly short of expectations, attributing the slower growth in Hong Kong to escalated investments in their ePension initiative, which saw a 6.8% decrease in profit before tax despite a healthy revenue increase of 12.8%.

In their assessment, DBS emphasized that while profitability faced a dip now, both revenue and profits from the ePension segment are anticipated to rise significantly in the latter half of 2025 as their eMPF platform onboarding picks up speed.

Yet, amidst these mixed signals, DBS remains optimistic about iFast, maintaining a 'buy' status on the stock with a target price set at S$10.88. Investors are now left watching closely as the company navigates its way through these turbulent waters.