KVB Kunlun Shares Spike Higher by 13% as Leveraged & Cash FX Incomes Rise

KVB Kunlun reported its full year 2014 financial results this morning, detailing that margin from the company’s FX operations have

kvb_kunlun_squareHong Kong listed leveraged foreign exchange provider KVB Kunlun Financial Group (HKG:8077) has unveiled its full year results for 2014, revealing that the company’s income from foreign exchange dealing in 2014  increased by more than 6% to $18.5 million (HK $144.2 million). The broker has also been providing non-margin FX services to corporations in New Zealand, a business which has grown materially too.

Foreign exchange cash dealing income from the operations of KVB Kunlun Financial Group (HKG:8077) increased by 44% to $2.1 million (HK $16.6 million). The company’s total income for 2014 increased by 6.7% to $24 million (HK $188.6 million). Bottom line, the Hong Kong listed broker registered a flat year-on-year result reporting net profits totaling $4.5 million (HK $35 million).

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Earnings per share declined to HK $1.75 per share when compared to HK $1.9 in 2013. For the year after, currency translation differences accounted for a loss totaling $680,000 (HK $5.3 million).

The bulk of the business of KVB Kunlun Financial Group (HKG:8077) has been transacted through the company’s New Zealand subsidiary which accounted for $18.6 million (HK $144.2 million) of revenues from leveraged foreign exchange and other trading. Revenues from Hong Kong margin dealing totaled $5.88 million (HK $45.6 million).

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Shares of the company reacted by trading materially higher after the earnings report publication. KVB Kunlun Financial Group (HKG:8077) was valuated at $380 million (HK $2.94 bln)

Expansion Plans into China and Japan

The company detailed in its announcement that after a period of challenging volatility in the first eight months of the year, the firm has managed to capitalize sufficiently and alleviate the negative effects during the final four months of 2015. The total number of clients of the company increased by 36.1% in 2014, however, the firm doesn’t specify whether these are active client figures.

Net profit margins at KVB Kunlun Financial Group (HKG:8077) were reported at 18.6% with higher trading volumes in higher leverage foreign exchange instruments driving revenue growth.

The company outlined in its earnings report that it planned to commit resources to expand its operations in Japan and China, while increasing the range of products and services it offered.
This doesn’t come as a surprise as the broad trend across the industry is for forex brokers to take their aim into multi-asset space.

KVB Kunlun Financial Group (HKG:8077) also plans to improve its trading platform, while highlighting that strategic options remain on the table after about $16 million (HK $125 million) of existing capital raised as equity will be committed to the realization of the plans mentioned above.

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