Short-sellers vs. iFast: who wins?

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](.  ---------------------------------------------------------------  Written by Simon Huang  Journalist  Hello {NAME} Many investors are natural optimists. So typically, they take a dim view of short-sellers, those who bet that a company’s share price will fall. In a world where most investors are wagering on share prices going up, the prospect of someone making money off of the opposite makes many uneasy. While I consider myself relatively optimistic by nature, I do have respect for short-sellers. It’s difficult to go against the grain, and short-sellers can face unlimited losses - in theory at least - since there’s no cap on how high a company’s share price can go. This week’s featured story is about a little-known short-seller, [Sakura Research]( that put out a report on Singapore-listed bank and wealth management platform iFast (AIY, SGX). The report questions how sustainable revenue from iFast’s Hong Kong ePension unit is, the performance of its UK digital bank, and even the sustainability of its core wealth management platform, which faces intense competition. In response, iFast, along with sell-side research analysts that cover the company, have refuted the short-seller’s claims. According to iFast, revenue from its ePension division can be sustained over the contract period of seven years. CEO Lim Chung Chun also stated that revenue recognition will actually increase going into 2026. Meanwhile, analysts are keeping faith with iFast for now. They note that profitability (measured by profit before tax as a percentage of assets under administration) in the most recent half year is actually higher than in 2022. Who’s right? We’ll leave you to read the story and make up your mind. Beyond that, while it’s a cliche to say that time will tell, that rings true in this case. -- Simon  ---------------------------------------------------------------  THE BIG STORY [IFast, analysts refute short-seller claims]( The firm has continued to guide for revenue from its ePension unit to be sustained over a contract period of seven years. ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Goodbye, Vietnam: GoTo Group (GOTO, IDX) is [exiting Vietnam]( a market where its ride-hailing business was struggling to compete with Grab (GRAB, NDAQ) and local players such as Be Group. The company claimed during its [2023 Q3 earnings call]( that both Singapore and Vietnam had positive contribution margins. During GoTo’s [most recent earnings call]( CEO Patrick Walujo noted that its market share in Singapore had actually gone up by 3% in the second quarter of the year, buoyed by its partnership with leading taxi operator ComfortDelGro (C52, SGX). This may be the saving grace of the Singapore business, for now. 2️⃣ Read between the lines: PropertyGuru (PGRU, NYSE), the real estate listings portal, reported a [second quarter net loss]( of US$12.3 million, worsening from the US$5 million loss recorded in the corresponding 2023 quarter. On the surface, this might support the view that selling to private equity investor EQT (EQT, STO) - which announced last month that it is acquiring PropertyGuru - makes sense. However, look more carefully and the numbers don’t seem all that bad. The increase in losses was actually due to various accounting, non-cash items. Adjusted earnings actually rose by 48%, while revenue was up by over 10% year on year. EQT might be onto something. Last week, Australian property listings company REA Group (REA, ASX) announced that it is considering buying Rightmove (RMV, LON), the UK’s leading portal for home listings. With interest rates set to decline globally, property transactions may begin to rise, setting property portals up for a nice spike in business activity. 3️⃣ Trying something new: Thai telco AIS (ADVANC, BKK), which was founded by former Thailand prime minister Thaksin Shinawatra, [announced]( that it is diversifying its business by going into cloud computing and renewable energy. Previously, the company had already announced a collaboration with US cloud giant Oracle (ORCL, NYSE). As mobile and internet services become increasingly commoditized, it’s no surprise that telcos are looking for new avenues of growth. Indeed, Singapore’s Singtel (Z74, SGX) - which also owns a significant stake in AIS - has seen its share price rise by 34% over the past year, in part due to its offering of [GPU-as-a-service]( to partners globally. 2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [US$279 billion]( The amount of market capitalization lost by chipmaker Nvidia (NVDA, NDAQ) after its shares were hit over concerns regarding the sustainability of the AI-induced spending boom for its products. - [1.3%]( The average return posted by hedge funds in August, a month which saw huge spikes in volatility due to concerns over the US economy. ---------------------------------------------------------------  TECH IN ASIA’S FOUNDERS MEETUP: THAILAND ON SEPTEMBER 11 Who’s in Bangkok this week? Skip the awkward networking and experience the energy of Southeast Asia's fastest-growing tech hub at Founders Meetup Bangkok this Wednesday. Connect, collaborate, and make things happen with top investors, trailblazing founders, and industry game-changers from DFDL, Cart Biz International, JobNet Group, Swiftlet, Indelible Ventures, and more, all gathered in one room. Final few 1+1 bundles left - we won’t be adding more once they’re sold out. [Get your tickets now!]( THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. Too much of something: Having large domestic investors - pension funds, sovereign wealth funds, and the like - hold on to large stakes in locally listed companies might seem like a good thing. After all, these backers are perhaps the ultimate long-term investors. This, along with the fact that they’re rooted to the country, makes them much less likely to cut and run at the slightest sign of trouble. However, can there be too much of a good thing? Bursa Malaysia (BURSA, KLSE), the country’s stock exchange, is [reportedly]( considering how it can loosen the grip these large domestic investors have on locally listed stocks. This should encourage more trading in the counters and attract foreign investors to the Malaysian market, which has been one of the best-performing in Southeast Asia recently. For example, Malayan Banking Berhad (MAYBANK, KLSE), one of the country’s top banks, has a free float of just 43%, which means that a majority of its shares are not available for trading. The review comes at an opportune time, as emerging markets investors are having to look beyond China. Yet, there is a fine balance to strike. Foreign capital can leave as quickly as it comes in. ---------------------------------------------------------------  EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](.  [Tech in Asia Conference Jakarta on October 23 - 24]( Nicholas Nash, managing partner and co-founder of Asia Partners, will be delivering the opening keynote at TIA Conference Jakarta and share his insights on Southeast Asia’s tech resilience, focusing on the markets and industries that have kept the region powering through. He’ll also explore the underlying factors that enable this continued growth and development. Final batch of third-release tickets are now up for grabs at 45% off, [get yours today before offers end on September 8.]( [Leadership Collective: Building at Scale on September 26]( Calling all senior product developers and engineers! We’re teaming up with Figma for an exclusive, insider look at how the fusion of AI and engineering is breaking down silos and rewriting the rules of product development. Seats are extremely limited - [apply now.]( [Gemini Day for Startups: Indonesia on September 26]( You want generative AI solutions that actually deliver, right? Cut through the noise with Google Cloud’s Handi Tantiono and discover how startups are winning with genAI right now - broaden your perspective, gain actionable strategies, and glean next-gen insights. Limited seats available - [apply for your invite today.]( [SYNC 2024 on October 08]( Get ready to experience the future of AI at #SYNC2024, an exclusive, closed-door event convening 100 of Asia's most influential minds in the AI landscape. We're thrilled to announce that Min-Liang Tan, co-founder and CEO of Razer, will be joining our main stage speaker lineup. Besides the main stage content, expect tailored roundtables, demos from AI startups, and networking opportunities aimed at equipping you with the knowledge and resources to navigate the ever-evolving AI landscape. This exclusive event is by application only. [Find out more about SYNC 2024 today.]( [Startup Factory at Tech in Asia Conference Jakarta]( Are you a founder looking for inspiration, connections, and the latest tech insights? Look no further than the Startup Factory at #TIAConferenceJKT! This exclusive space, designed for founders like you, will showcase the region's most promising tech companies. Get up close and personal with the innovators shaping the future, discover the trends driving the tech industry, and connect with potential partners and investors. Competition is fierce and limited booth slots are available. [Apply now!]( That’s it for this edition - we hope you liked it! Not your cup of tea? 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