Among the forex IPO class of 2013 is Hong Kong listed KVB Kunlun Financial Group (KVB). A provider of forex and financial product brokerage services, primarily to Chinese and Asian investors, KVB recently released its first set of financials since going public on the Hong Kong exchange’s Growth Enterprise Market (GEM) on July 3rd, 2013.
During the quarter ended September 30th, KVB posted after tax earnings of $347,226 (HKD2.691M) on revenues of $7.76 million (HKD36.9M). Compared to the same period in 2012, revenues grew 11%, on the back of a 23% rise in ‘Leveraged FX and other trading income’. Similar to other forex brokers, KVB’s Q3 figures fell from performance achieved in the first half of the year, as revenues declined 14.4% from Q1 and Q2 averages.
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Overall, for the nine months ended September 30th, KVB has reported net income of $3.05M (HKD26.64M). At a recent share price of HKD 0.40, the broker has a market cap $102.8M. Calculating Q4 earnings based on the first nine months of the year averages provides earnings per share HKD 0.0178, representing a PE multiple above 20. At such a multiple, we believe shares of KVB are trading at an overall market premium due to its exposure to the Chinese and Asian growth markets.