The Hong Kong-based retail forex brokerage group, KVB Kunlun Financial Group Ltd. (HKG:8077) has released a strong set of numbers for the first half 2018, after two consecutive years of weak performance. During the period, the brokerage reported a sharp uptick in both revenue and profits.
The revenue for the first six months in 2018 came in at HKD 306.2 million (USD $39.0 million) which is slightly lower compared to the second half of 2017 figures which were at HKD 317.8 million. But when compared to the January-to-June period of 2017, KVB’s revenue is higher by a sharp 55 per cent.
Net profits during the six months period came in at HKD 10.4 million against HKD 3.1 million for the first six months of 2017. In the second half of 2017, the company earned HKD 28.1 million in net profits. The growth is largely driven by broker’s leveraged trading revenues and in the first half, KVB raked in HKD 233.46 million ($29.74 million) in revenue from its leveraged trading business which is 47.8 per cent increase on last year’s HKD 157.97 million ($20.12 million). According to the company statement, the boost in the H1-2018 earnings was a result of income from the fair value gain on the derivative portion of convertible bonds.
The firm also reported a massive increase in expenses which is at HKD 188.78 ($24.05 million) for the H1-2018, an increase of whopping 44.9 per cent from HKD 273.52 million ($34.84 million). Pre-tax profits mainly contributed to the massive increase in expenses.
Owned by China’s CITIC Securities Company Limited (SHA:600030), KVB Kunlun is aggressively expanding its operation in worldwide overseas Chinese communities. During the first half, KVB raised HK$200 million (USD $26 million) in the capital, in an investment led by Chinese insurance and investment giant Ping An Insurance (Grp) Co of China Ltd (SHA: 601318). CITIC which holds almost 59 per cent of the entity is looking to trim down its holdings near to 51 per cent.