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Good morning, everybody. Welcome to the 4Q 2020 and Full Year 2020 Results Briefing. So my name is Jean Paul, from the Corporate Communications team. And together with me are the CEO, Mr. Lim Chung Chun; and CFO, Mr. David Leung, from iFAST Corp, who will also be presenting after me. I'll just be running through the key summary with you before David runs through section one, and Chung Chun will be running through section two as well as the Q&A with you.
So I'll start with the key summary. So the group reported record quarterly net profit of $6.83 million in 4Q 2020. That's an increase of 127.5% compared to 4Q 2019. This was achieved on the back of 43.5% year-on-year increase in net revenue and 41.6% year-on-year increase in gross revenue. For full year results for 2020, net profit grew 122% year-on-year to $21.15 million, again, on the back of 21.7% increase in net revenue and 35.5% year-on-year increase in gross revenue.
The growth in profit was substantially higher than the growth in revenue. This shows the positive operating leverage and scalability of our group's business model. The improvement in our business shows that iFAST Corp continues to be a beneficiary of increased digital adoption in the wealth management industry, the improvements we've seen across both our B2C and B2B businesses. Net inflows hit a record high of $3.16 billion in 2020, which helped our group's AUA to a record high of $14.45 billion as at December 31, 2020.
So we believe that the robust growth seen by the group this year has resulted from our past investments in building up a strong integrated digital wealth management platform. We'll continue to work hard on the various initiatives in all the existing markets that we operate in to ensure that the medium to long-term growth prospects will remain strong.
The group's AUA in full year 2020 at 44.5% year-on-year as well as the continuing positive momentum in net inflows that we've seen will serve as tailwind for our business performance as we have entered 2021. Barring unforeseen circumstances, we expect further growth in our business performance and targets to improve our operating margin in 2021.
For the final dividend for full year 2020, the directors have proposed an increase in dividend from $0.009 per ordinary share in full year 2019 to $0.01 per ordinary share. The proposed final dividend will be subject to approval by shareholders at our AGM, which will be held on 23rd of April 2021.
On the next slide, we have shared this in January for our group's AUA number, so it's up 44.5% year-on-year and 14.8% Q-on-Q to a record high of $14.45 billion as of December 31, 2020. In terms of the net inflows, as mentioned, the group has hit a record $3.16 billion in terms of net inflows for the full year 2020. In fourth Q 2020, the number was at $847 million, substantially higher than the number in the previous quarter in 2019. Similarly, for subscription ex switching, the group hit a record high number in 2020, and the fourth Q 2020 number was also substantially higher compared to 1 year before that.
So I'll now invite David, our CFO, to walk through the financial results in section one. Thank you.
Good morning, ladies and gentlemen. I'm now going to present the financial results for the fourth quarter and also for full year. So for the fourth quarter, our gross revenue is about 42%, growth of about $47.9 million. Net revenue increased by about 43.5% growth to about $24.3 million. Other income is about 200% growth to $1.56 million.
Operating expenses increased by 23.7% or $17.6 million. We have placed small net finance costs, about $60,000, and the share of loss of results in Q4 for associates is about [ $0.27 million ]. So PBT for Q4 is $7.96 million, about 134.2% growth. PAT is $6.77 million, about 129% growth.
Net profit attributable to owners of the company is $6.83 million, about 127.5% growth. EPS for Q4 is $0.0251, about 124% growth. We proposed a final dividend per share of $0.01 per share, which is about 11% growth compared with Q4 [ 2019 ].
Next slide. So for the full year 2020 result, we achieved gross revenue $169.93 million, about 35.5% growth. Net revenue is about $85.86 million, about 32% growth. So the growth of the gross revenue and net revenue is mainly due to the growth of our business, the increase of the AUA from the sale for net inflow and market impact and also the growth from the nonrecurring net revenue from stock and processing fee and gross margin. All this contributed to growth of the gross revenue and net revenue.
Our full year other income of about $5.21 million, about 155% growth, but mostly mainly due to the government brand from Singapore government and also Hong Kong government. Our operating expenses increased by 16.5%, growth at about $65.29 million. We have a small net finance income, about $30,000. Share of loss of result associated is about $410,000 for financial year 2020. So our full year profit before tax is about $25.39 million, about 129% growth. Profit after tax is about $20.96 million, about 125% growth. And our net profit attributable to owners of the company, $21.15 million, about 122% growth. EPS for full year is $0.078, close to 120% growth compared with full year -- financial year 2019. Our dividend per share for the full year is about $0.033 per share, which is about 4.8% growth compared with the last year.
Next slide, please. So this slide shows the 5-year result for our group, including the China operation. I think I will go through it. Okay. I'll just highlight some figures. So at the bottom, you notice our operating cash flow for financial year 2020 is about $41.56 million.
Next slide, please. If excluding the China business, our gross revenue was about $168 million, net revenue $84.1 million, other income $5.18 million. Operating expenses about $58.44 million. Net finance income of about $90,000, no change for share of result of our associate. So our PBT, excluding China, will be about $30.45 million. PAT, excluding China, will be about $26 million, and EPS excluding China about $0.096. And the operating cash flow is about $45.1 million, excluding China.
Next slide, please. So this chart here, we saw the PBT margin based on the net revenue. So the left-hand side is including China operation. So notice that in financial year 2020, our PBT margin for the group, including China increased to about 29.6%. On the right-hand side, excluding China operation, our PBT margin is about 36.2%.
Next slide, please. This slide show some financial indicators. So EBITDA, EBITDA is about $32.98 million for year 2020. Net cash position about $53.28 million. We have operating cash flow about $41.56 million and -- including China. And excluding China, our operating cash flow is about $45.1 million. Our CapEx for 2020 is about $12.63 million. Current asset is $58.35 million. And our shareholders' equity at the end of fiscal year 2020, about $104 million.
Next slide. This slide just show the further breakdown of the net cash position that I mentioned earlier. So our cash and cash equivalent at the end on December 2020 is about $36.44 million, and other investments include the investment in finance, so except -- under current asset is about $16.84 million. So altogether, the total cash and other investment is about $53.28 million. We have fully repaid the bank loan during the year 2020, so we have -- the net cash position, we gave as $53.28 million, and the gross-to-debt equity ratio is 0%, and we are in the net cash position.
Next slide. So this chart will show the group operating cash flow for the last financial year. As mentioned earlier, operating cash flow, excluding China, is $45.1 million, including China is $41.56 million.
Next slide. CapEx, we spent about $12.63 million for the financial year 2020. Number of issued shares at the end of December 2020 is about 272 million. So this is our consolidation financial position, the group balance sheet. So our total noncurrent asset is about $59.67 million only considering the plant and equipment and intangible asset and goodwill, and also the right-of-use rise asset, which is actually mainly the tenancy agreement of the office. And our current assets are $194.6 million, mainly due to the uncompleted contract buyers at the end of the year, which is about $94 million, and also our cash at bank and in hand, money market fund and also other investments. okay. So -- and our client trust account at the end of 2020 is about close to $940 million.
Next slide. So our short equity, I mentioned earlier, is $104 million. Non-current liabilities mainly due to the lease liabilities for the office is about $12 million. So the total non-current liabilities is about $14.6 million. Total current liabilities, about $136 million, mainly is due to the uncompleted contract sellers at the end of the year, about $94 million. As mentioned earlier, we have fully repaid the bank loans, so the bank loans is nil for the bank at the end of 2020. So total liabilities about $150.87 million.
Next slide. So lastly will be the proposed final dividend for financial year 2020. We propose the final dividend is $0.01 per ordinary shares. Ex-dividend date is 3rd May 2021. Record date and time will be 4th May 2021, and the payment date will be on 17th May 2021. So I think just to highlight, this will be subject to the approval by the shareholders in the coming AGM on 23rd April 2021.
That's all from me. Thank you.
Thanks, David. Now I'll move on with section two, based on the performance trends. This slide here, Slide 23 shows the breakdown of AUA by markets. So as you can see, Singapore continues to be the key contributor for the group. In fact, the percentage contributed by Singapore actually increased a little during the year, showing the very strong performance in the Singapore business has actually seen during the year.
In terms of the breakdown by products, you'll note that Unit Trusts continue to be the key asset class for us. So 75% of the AUA at the end of year 2020 continue to be counted by Unit Trusts. The -- then our #2 achievement will be the cash portion. I think the cash and Unit Trusts actually contributed the highest level of recurring income. So having a good percentage from this portion, which will be very healthy from the perspective of [indiscernible].
Next. This chart here, as usual, show the trend of net revenue since we -- since 2004. So for last year, we continue to grow. In fact, the growth rate was stronger than what we have seen for quite a number of years. So last year was actually a year where our overall growth accelerated. The red bar shows the nonrecurring income and the blue shows the recurring income. So both components grew, even though the nonrecurring income grew at a stronger pace. But the recurring contribution from net recurring income is around 70%, which is still at a very healthy ratio.
Next. This chart shows net revenue as a ratio of average AUA. So as I noted, the contribution from nonrecurring income increased during the year, but the contribution by net recurring income is still very healthy at about 70% of our overall net revenue. You actually find that during the year, the net revenue -- total net revenue as a proportion of overall AUA actually improved compared to the previous year.
Okay. So the following few slides are the actual numbers showing the trends over our last 5 years. I won't -- yes, read to you in detail. I think that those are self-explanatory.
Next. This one is on net revenue. Singapore continues to be the key contributor. So we saw growth in every market and the biggest market, Singapore, as you saw, very strong.
B2B segment. And the next slide will be the B2C segment in terms of the breakdown of net revenue.
Next. And P&L by geographical segment, you'll notice that the biggest contributor was actually Singapore. In fact, that actually had the highest growth in terms of profitability for us. So I think it's good our core market [ is able to ] be at a stage where we're able to continue to generate a lot. Yes. This is the P&L again. This chart is the chart that we have been showing for quite a number of quarters already. The overall bond business that we have in the 3 markets, Singapore, Hong Kong and Malaysia, that has continued to grow. This chart shows how the Singapore business has actually grown. So you'll find that certain -- first Q of last year, it has actually accelerated, and that continued to actually accelerate for us for both B2B and B2C segment.
Yes. So quick summary on each of the key markets. So Singapore, as I mentioned, that continues to be not just the biggest market, but actually a market whereby we have been able to see very strong growth. So net revenue for Singapore for the year grew by 34%, but fourth quarter year-on-year, the growth was, in fact, very strong at 50% compared to -- yes, it's a 50% year-on-year growth for fourth quarter of 2020. The -- in Singapore, we have -- historically, we have talked about the B2B and B2C division. I think this particular quarter, we actually gave a bit of detail on a division that we call the iFAST Global Markets division, iGM. That's actually our in-house advisory arm that we started a few years back. That actually has actually shown very good progress particularly in last year and is now currently a significant contributor to the whole group growth. So B2B, the iGM as well as B2C have actually done quite strongly during the year. Hong Kong grew during the year, but it didn't grow as strongly as Singapore and Malaysia. The B2C business of Hong Kong was actually quite strong, in line with our B2C business in the other markets. B2B, however was a bit slower. And I think the other factor that in a sense, reduced the overall growth in net revenue for Hong Kong as well as the net interest income that we get from our Hong Kong business. As you know, interest rates have been declining in the past 1 year. So that certainly had affected the net interest income that we get from the Hong Kong segment. So that actually reduced the overall growth rate.
Of course, in Singapore, we have also net -- lower net interest margin from the cash portion, but because of proportion of increasing the cash is very strong debt, actually meant that we have continued improving our net interest income. But Hong Kong, that -- the impact of a negative decline in interest rate was actually more obvious. So the overall growth rate on net revenue then wasn't as strong.
So I would just like to have a quick word about the eMPF project that we mentioned previously. I think in the recent press release, we gave a bit of update on this particular project -- okay, eMPF in Hong Kong have announced that they have awarded a contract to PCCW. And because I think the market is aware that we have a partnered with PCCW in the contract. So that's why we thought that we had to give an update at the end of January. At this point in time, however, we're not able to give too much detail as yet because we're still in the stage where certain details are still pending finalization and so on.
I would just like to comment that you can refer to some publicly available information that's been released by eMPF in terms of the nature of the contract, particularly, the part C of the contract, then you actually understand that our role would be seen more from 2022 onwards in terms of contribution for quite a number of years. At this point, I would just say that it will be a very material impact when the whole thing is finalized. But at this stage, not able to give further comments, and we hope to do so at some time in the future.
Malaysia had a good year as well. I think Malaysia has been at a stage where the growth momentum for us has been quite strong. I think I was seeing quite similar growth in Malaysia as compared to Singapore, the B2B, B2C, iGM divisions have all grown quite strongly. In addition, in Malaysia, we do have a significant contribution from IT services under the Fintech Solutions division. We actually get some income for providing IT services to other financial institutions and to eMPF and so on. So that market continues to be an interesting one, and we expect to be able to continue to grow.
We announced some months back that we've been awarded stock working license in Singapore. We're currently preparing. We expect to be launching that business in the next few months.
China, I think China is a market where, in the initial years, we -- the growth rate wasn't that good. I think particularly 2019 was actually a tough year for us. I would say that at the initial period, some of the services and so on, perhaps were not fully in place. And also the China market several years back was quite -- dominated quite a bit by a lot of the -- this guaranteed product, et cetera, which we don't do, and that affected our overall ability for us to ramp up there, the volume on the mutual funds on our platform.
But I think the past 1 year, we actually find that the momentum has gotten steep. We feel that we are starting to see clearer signs that the business for us in China will be available at a robust pace. I will add, however, that I think in the current year, we expect that the growth in revenue can be quite significant by -- in terms of profitability.
Perhaps we will not really be seeing the improvements yet because we are at a phase where we feel that what's more important for us is to be able to ensure that the overall size of our China business is sizable, and we are able to continue to -- we want to be able to continue to invest and make sure that we've got momentum so we can continue.
So our profitability may not really be Improving in the current year. We think that we'll start to see that benefit looking forward into 2022 and beyond. But I think at the current situation for our group, you should find that the overall profit that we have from Singapore, Hong Kong and Malaysia are quite sizable already compared to the losses that we're currently seeing in China. So we're actually quite comfortable with the additional investment that we need to make in China, and that should not stop the group from being able to show a healthy growth as we move on.
Next. India, unfortunately, did not see a good year. I think the AUA was pretty much flat. And then we were still making some options, but it's an associate company. So the overall net loss contribution growth isn't that substantial. We continue to believe that going forward, it will be a market that we'll be able to grow well and be interesting for us. So yes, we are at a phase where we'll continue to invest on the business to make sure that India will be interesting.
So those are the key updates on the different markets. I would like to end off by saying that in our outlook statement for the year, we -- the Board indicates that we expect that the -- we should continue to grow in 2021 compared to 2020. I think the 42% growth in AUA that we saw last year will actually act as a tailwind in terms of our overall prospects for the current year. It's also encouraging to find that the net inflow for us in terms of current assets access has actually been pretty strong. So 3Q and 4Q actually -- has actually been quite robust for us, and we have reason to think that this will remain quite healthy.
And yes, so that's the presentation from us and I'll stop there and will move on to take some of the questions.
[Operator Instructions] Before or prior to our presentation, we actually received a few questions from Royston Yang, from the Smart Investor. So Royston is a senior analyst at Smart Investor and he has a few questions for our management team.
So the first question is that iFAST recently announced that it has reached eMPF contract as a contractor for PCCW. Maybe you can define the terms of the contract, how will it be structured and financial implications for the group.
Yes. So for eMPF, as I mentioned, at this point in time, we are unable to give the details on the terms of contract. We look to do so some time or we'll look to give guidance in terms of how our overall group can improve sometime in the future. So at this point, I can't comment so much, except, as I mentioned, you can refer to the publicly available information on the tender. You actually note that part of the contract will stretch mainly from 2023 onwards for a period of [ 37 days ]. And that is the key role that iFAST will be playing. And it will be a material impact for us going forward, but we can only give more details in the future.
The second question from Royston is what's the time line like for iFAST to commence the trading for Malaysian stock.
As I mentioned earlier, we expect to launch the business in the next few months in Malaysia.
And the next question from Royston, progress and status for the product fund management license in China? And also, what's the current AUA for China? And what's the projected growth for this AUA? Will investors see a breakeven strategy soon?
So regarding private fund management license, I think that in previous months earlier, we have actually made an announcement regarding that. We're now preparing to actually launch this business.
Current AUA for China, I think that has been provided in the slide. So I think we said about RMB 1.39 billion as at the end of last year. That was a healthy growth during the year of 170%.
Will investors see a breakeven point soon? As I mentioned earlier, for this current year, while we expect that there'll be good growth in revenue and AUA, but in terms of bottom line, we probably won't see much improvement. And the reason is because we are at a phase whereby we believe it's more important to continue to invest to make sure that we're able to have a very good growth rate in China.
We look at the level of losses that we're making for China, and we look at the overall group profitability that we had, and we feel quite comfortable about the size of the losses that we expect to make for the current year. I think the balancing of the improving bottom line will likely be felt from 2022 onwards. And yes, the current year, we will be focusing on ensuring the AUA rating.
So the next question from the Royston is whether iFAST is bidding for other contracts similar to the one that is reached for the eMPF.
I think I have to say no, because I think the eMPF project is one of a kind. It doesn't come about every other year. So certainly nothing of the kind of size and quantity.
Another question is that iFAST -- does iFAST have any plan to be part of the upcoming Malaysian digital bank license that should be released this year?
We -- for the Malaysian digital bank license, we have been studying that. We expect that we will be bidding for it as well. We'll be submitting an application for this as well. I think further details -- yes, will provided in the quarters of it.
And the last question from Royston, which is a similar question has been asked by Sharon from Jefferies is that, can we also share about the AUA trend for iFAST? The AUA has been growing quite rapidly as of 1st of December, 44.5% year-on-year. So what is the projected long-term percentage growth in AUA? And will the 2028 target of $1 billion achievable -- $100 billion?
Okay. I think we mentioned about the target of $100 billion in 2018. At that time, in order to achieve that number, we were looking at projected growth rate of 28% per annum in terms of the AUA. But I think for the first 1 or 2 years, we were growing at slight -- at somewhat below the 28%. But last year, things accelerated.
I would say, it accelerated for a couple of reasons. One, of course, the increased pace of adoption of digitalization have actually helped. I suppose why it's also important to note is the fact that we have been working hard in the last 5 years, 6 years, to ensure that we have integrated wealth management platform that can handle all the different products. So I think last year, we started to see the benefit of that a lot more clearly and the growth rate accelerated. So from where we are, we look at the target of $100 billion in 2028, the way the opportunities are lining up in the whole industry, we feel that there's a decent chance for us to be able to reach $100 billion by 2028.
I think it's worthwhile. I don't think that $100 billion is in itself, not a big number. I think if you look at some of the U.S. players, a platform like Charles Schwab, for instance, I think you're looking at something like USD 4 trillion in terms of AUA, and that comes mainly from the U.S.
So for us, we're talking about us being present in Asia in 5 markets. So to actually be able to, at some point, get to $100 billion or by 2028, get to $100 billion, I don't think it sounds too far-fetched if you look at the size of the market potentially for this business and based on the lessons that we're seeing from other more different markets. Yes.
Okay. We have a question from Paul Chew from Phillip's research team. So he is asking about the longer-term acceleration in China. And what are the operating milestones to achieve this?
Yes. I think -- well, our business in China as well as in all the 5 markets we're in, we are essentially an investment platform. And similarly, China, that's a business investment platform as well. The main difference is that for China, we don't have our FSM and funds from one channel directly. We have our B2B business and the -- call it the iGM business, which is our in-house advisory division. And that is the business that we actually do. And we believe that there's a very substantial opportunity for this B2B opportunity in China. And that is essentially the goal that we have set up, and that continue to be the same.
Next, we have a question from Lee Keng from DBS. He is asking whether there's any guidance on the OpEx?
Yes. At this point in time, we are not immediately giving any guidance on OpEx. What I would like to say is that we're targeting to be able to grow our net revenue at a faster pace than the base at which we grow the operating expenses. And that's in line with our planning in terms of targeting to improve our operating margin, as mentioned in our results announcement.
Next, we have 2 similar questions. One is from Paul Chew and another one is from [ Hu Shen Hee ] from Tokio Marine. So they are asking a question related to the eMPF. Whether it's starting from 2023? And what is the project type revenue or whether it's recurring? And for [ Hu Shen Hee ], he's asking whether the platform is only partly operational or effectively [ '25 ] that it's fully operational?
So yes, so as I noted, if you look at the information that has been provided by eMPF, you should arrive at the conclusion that the revenue that we get should be recurring and should start from 2023 onwards.
And next, we have a few questions from Andrea from CIMB. So the first question from her is that she understand that there'll be tailwind from the recent new growth going into 2021. So which segment or region do we expect to be the key growth driver for the business? And if you see trading volumes in conclusion be -- can be sustainable for 2021?
Yes. We are certainly targeting and hoping for quite a broad-based kind of growth. We think that Singapore will continue to be able to see good momentum based on the strong net inflow that we have actually been seeing.
The growth that we're seeing comes not just from the trading volume on the stock broking side. But it also comes from the unit trusts side. I think you'll note that our overall unit trusts AUA for the group and from Singapore has actually continued to grow. And that will allow us to grow not just nonrecurring income, but recurring income as well.
It is a common understandable concern about whether we are able to sustain some of the trading income. I would say that in our case, unlike many other stock broking firm, we actually firstly build up the overall recurring income quite well. Secondly, even from the stock broking side of business, yes, the overall model that we adopt is actually such that we see the net inflow in the overall business. And because the AUA part or overall AUA, that clients are likely to continue to see us. And we start from a small base, so we think that we still have very good room for growth.
And for other countries, as I mentioned earlier, we expect that there's still pretty good opportunity from Malaysia, Hong Kong and China. And yes, so we are targeting for quite a broad-based kind of growth for this particular year.
So the second question from Andrea has already been answered, so we'll skip that. And the third question from Andrea is that, is there any more JSS to be expected this year? Noted that there was [ $2 million ] received into 2020.
We expect to have...
One more in Q1.
Yes. We expect to have one final contribution in first quarter of 2021.
We have a research question from Krishna from Jefferies in the call.
Are you able to hear me?
Yes.
Yes.
Yes. Just a few questions. Just on -- some of them have been asked, but I just wanted to ask something more. So you are not giving your OpEx guide. You had given last year, and I understand those reasons. But say you -- but you're also saying that you want to grow your net revenue faster than the OpEx. So will you hesitate a guess or rather a guidance on your margins, say, either PBT margins or OpEx margins? That's the first question.
And second question is, will you give a CapEx guide for 2021? That is my first question. I have a few more in the pipeline.
Yes. Firstly, regarding the operating expenses guidance for 2021. At this point in time, we -- yes, are not pinning down the exact number as yet. I suppose, yes, the reason for that really is that we don't want to -- I think we're operating in an environment whereby, yes, along the way, if there's some opportunity that emerges and as we prepare for some of the new projects and so on, there will be some preparatory work that we actually need to do.
What we target to do is to be able to balance our overall ability to capture growth opportunity and our overall ability to grow the bottom line and operating margin. So we actually find that typically, when the overall revenue growth is strong, that we are in a better position to be able to take on some additional investment during the year. So to try to give OpEx guidance very quickly during the year may not be the best idea at this point.
I know that for last year, we actually did provide the OpEx guidance. And the reason why I did that for last year was because prior to last year, we actually went through a couple of years whereby we were actually growing revenue quite well. But the profitability growth was more patchy. So we -- so at the end of 2019, early 2020, we basically wanted to assure investors that we -- our business is scalable. We do need to continue to increase OpEx at a huge percentage. So I wanted to give the assurance to investors that we can grow our profitability quite well for 2020. So that's the reason why we gave the guidance. For this year, of course, we expect -- we continue to have the benefit of a business model that is scalable. And that's why we made the statement that we are targeting to improve the operating margin. But at this juncture, during the early part of the year, we are not immediately giving actual numbers.
Okay. Anything on the CapEx guidance? You had about $12.6 million this year. Anything? How much you're...
The CapEx guidance, we will be giving the guidance in the next 1 or 2 quarters as we firm up some of the other project within -- projected for eMPF and so on. So we are not immediately giving a guide.
Okay. Okay. I have a couple of more questions. And one is a bit of a tactical. So the Singapore, Hong Kong business that you said about, those color that you gave about the net interest income, that was very useful. Do you think that the net interest income trajectory for Singapore and Hong Kong would follow similar pattern as what you had in 2020? Basically, using more cash balances in Singapore and less so in Hong Kong, and your interest rates are relatively flat for 2021. Will that be fair to say?
We hope to be able to growth our interest income in Hong Kong in 2021. In a sense, for Hong Kong, in 2020, we are coming from a situation where the net interest income margin was higher than -- yes, perhaps what would be sustainable. And so when the interest rate decline the way it did, especially for U.S. dollar and Hong Kong dollar, then the effect was felt. But from where we are today, as we grow the overall AUA, we hope to be able to grow the net interest income for Hong Kong and certainly for Singapore also. Okay. We'll...
Yes. I have one more question. Just -- and this is a bit more of a long term. You are focusing a bit more on this advisory business. You have given a bit more color on that. So question is that doesn't it compete with your -- with the advisers who use your platform? And say more specifically, out of your 800 employees, how many employees are there in that iGM business?
Yes. So when we started our B2B business, I think, in 2003, 2-0-0-3, we took the decision not to have our own in-house advisers. And the main reason was because we wanted to avoid any conflicts with the customers -- the B2B customers and partners that we actually have. So that position was a position that we took for many years until about 4 years ago. 4 years ago, we decided that we should have this in-house advisory division that we call iGM.
So the -- at that point in time, when we made that decision, I think some of the B2B partners that we had were a bit concerned and some were not too happy about it. But we felt that it was important for us to make this move. Mainly because I think if you take markets like Singapore, and even some market like, yes, Hong Kong, a lot of the focus on the advisers tended to be on insurance. And in our case, we believe in overall wealth management model that, that focuses on the advisers' advising on the Singapore investment product, unit trusts, ETF, different forms of stocks and -- as opposed to a business that tend to focus on the high upfront commission. So in order to actually, in a sense, demonstrate to the overall industry that this model, what we decided, that we should have this in-house division.
So yes, so as I mentioned, we started this in Singapore about 4 years ago. And in the first 1, 2 years, it was not big number, but I think in the past 1 year, especially has become quite sizable.
In our case, I will say that because of the focus of the advisers on the investment product and on the rep account, one effect of this business is that the average AUA per rep, per individual adviser is actually quite high for us. So for instance, we only have about 40 advisory rep in Singapore because we didn't want to rush and have a big number. But that 40 actually brings about quite a sizable AUA for us. And so the AUA per advisory rep is actually one of the highest in the financial advisory industry. And it also allow us to showcase the business model of being able to advise on the different areas of, yes, investment, simple investment product, including ETF especially, which hasn't taken off that well in Singapore.
Yes. I think so far, that has been encouraging, and that is showing that things -- this model is actually working. Our partners, of course, initially, they were somewhat concerned. But I would say that right now, most of them are actually are actually quite comfortable with it in our division, and that is not an issue at this point.
So all of the -- so in terms of employees that we have, I would say that we have -- salary employee would be over 700 people in the 5 markets, including India. So in terms of the advisers under the iGM side, they're probably about 200 currently, yes.
So we have another question from Paul Chew. So he's asking about the recurring net revenue versus AUA, which is a bit lower from prior years. And he's asking why the drop and will this be the future ratio.
I think the key reason for the drop is probably that our AUA currently also includes the stocks AUA, right? Stocks AUA has grown quite significantly in the last 1, 2 years. So the stocks AUA doesn't directly contribute to the recurring income. I would say that it indirectly contribute to recurring income because we operate on the prefunded model. So before investors buy the stock, they have to put the money in a cash account or in our -- we call it Auto-Sweep account. And that part brings about the recurring income.
But because the ratio is calculated using the net revenue over total AUA, then you actually find that, yes, your net revenue as a proportion of total AUA has gone down. But because stocks actually contribute quite significant nonrecurring income, so the overall net revenue -- overall AUA percentage has actually improved during the year.
Next question. Regarding the eMPF question from Andrea. So she's saying, understand the details of the eMPF contract are still being finalized. There's a public funding of [ HKD 2.4 billion ] of development cost for the project. Could we get a sense of how this development cost will be spread over the project? And how this would affect iFAST's [ WI ].
What I can say is that the development costs, the development will be done mainly by, yes, our partner, and we are not directly the one doing that development. So we don't expect to see much benefit from the development side. Yes. And yes, I think that's what I can comment at this point. Yes.
Next question is from Paul Chew. The growth in AUA, in unit trusts, what type of funding, [ new structure ]. And the digital adoption in wealth management, does that mean DIY of wealth product or your product or just B2B.
Growth in AUA, what are the funds, I would say that it's quite a broad range of funds. Firstly, of course, equity fund is still the majority of that. So the majority of our unit trusts AUA were actually the equity fund, and that will include equity funds in the different market, be it Asian market, China market, U.S. market, et cetera. Usually include some sectoral fund, perhaps -- yes. So is it quite broad-based kind of fund. Usually, it include some money market fund because some market facility and so on. And of course, the overall bond market kind of fund, so pretty much spread out.
Digital adoption in wealth, does that mean more DIY or wealth product and platform or just B2B? I would say that it refers to both. DIY certainly is a sizable part of it. But I think the B2B is also the part that has been quite important. So we actually found during the circuit breaker last year, for instance, that iFAST perhaps was most ready as a platform in helping the various FA firm, financial advisory firm with the unit trust transaction. And that has been one key reason why we actually have done well last year as well. So yes, so digital adoption, not just by an investor, not just a DIY client, but advisers themself as well because a lot more of the processes move online, become digital. And the platform that's most ready to handle that will accordingly benefit.
So we have question from Lee Keng. Any guidance on dividend payout ratio? EPS for FY 2020 is slightly higher year-on-year. But in terms of payout ratio, it's only 42% versus other year-end of at least 60%, ex China firms.
Yes. We are not immediately pinning down a number as yet for this current year, but we did increase the dividend for the last 2 quarters. And our current thinking is that, yes, we'll see some gradual increase in dividend for this current year as well. But we are not on interim basis pinning down the percentage payout ratio.
I know that in our earlier years, we gave a guidance of 60% payout ratio, but I think in the last 1 to 2 years, we sort of stopped giving that more definite percentage. That's also partly because we feel that we shouldn't bind ourselves so much at a time where there are quite a bit of opportunities for us to explore. One of it, of course, was digital banking.
We -- unfortunately, we didn't get it in Singapore. But that broad thinking in terms of looking at some opportunities, including even digital banking opportunity, not just share restriction issue there. So we want to balance between being able to grow the dividend and ensuring that we have enough retained earnings for our purposes.
What are your thoughts already -- what are your thoughts on the possibility of scrapping of trailer fee? Yes. So I suppose for this particular question, for the benefit of investors who are not aware of some of these trends in some other markets like in U.K., for instance. You should find that certain countries in different parts of the world, such as the U.K., Australia, they have actually gone on to ban commission. And trailer fee is considered a form of commission for mutual fund or unit trust. So when they ban commission, what they essentially mean is that the advisers cannot take the payment from product providers. They cannot take the payment from the end client. That is essentially what the ruling means.
So trailer fee is a fee that's paid by fund manager to the distributor. So that would then be considered a commission. So countries that have actually gone down on this path, yes, I think there's some interesting lessons that we can actually draw from that. The first lesson really is that, yes, when you ban commission, the fact is advisers still need to earn. So if advisers need to earn, then they actually -- if they can't collect the earnings from the product provider, meaning the fund manager, then they collect the earnings from the end client. And the result that we have seen in countries like U.K. and Australia is that banning of commission actually lead to a faster adoption of investment platform as a way of doing their business, as a way of doing the business in the advisory channel. So platforms are actually among the key beneficiary of this change.
So what are my thoughts of the potential scrapping of trailer fee? My thinking at this point is that it's not likely in the next few years. But I would say that we actually don't mind if the regulator actually move in this direction. In fact, we think that on an overall basis, we can actually benefit mainly because the platforms generally start to grow a lot faster in an environment whereby commissions being banned. Because a lot of advisers will actually move away from focusing on high upfront, high commission upfront products such as insurance, and they focus on simpler product such as mutual fund and ETF. And essentially, then what it means is the platform, we will then have to introduce the platform fee or increase the platform fee because the whole industry will actually have to do that.
So if that actually happens, we think that it can have a net positive effect for us. But on the short term, next few years, we think that it's not likely to happen in the key markets we're already in.
Would participation in the eMPF project be more fee-based contractual partner or as an equity partner with PCCW. It'll be a fee-based contractual partner. It's not a joint venture. Yes, it's -- it will be -- as I mentioned in the press release of 30th Jan, we found ourself being a subcontractor. So it's actually in the form of a certain fee on an area basis.
Anybody else has any more questions? If there is no more question, then we can end the session.
Thank you, everyone, for attending the results briefing.