Hong Kong Forex retail forex broker KVB Kunlun Financial Group Ltd (HKG:8077) had its slowest quarter in a year and a half, reporting that Q2 revenues were down 21% from Q1, leading to a 61% QoQ drop in profits.
KVB brought in revenues of HK$ 83.8 million (USD $10.9 million) in Q2, its lowest quarterly revenue figure since Q1-2015. Net profit came in at HK$ 11.0 (USD $1.4 million), also its lowest such result since Q1-2015.
About half of the company’s revenues came in via KVB’s New Zealand arm, and the other half in Hong Kong.
KVB reported having 86 employees at the end of Q2, down from 89 at year end.
Looking forward, KVB’s Chinese subsidiary Zhuhai Hengqin Kunlun Financial Exchange Limited (“KVB ZHHQ”) entered into a Membership Agreement with TPME (Tianjin Precious Metals Exchange Limited) in China, with a view to broaden the Group’s customer base and enhance its trading volume and profit in precious metal.
Control of KVB was acquired last year by Chinese giant CITIC Securities, which bought a 60% stake in the KVB. CITIC attempted to buy out the remaining minority shareholders at HK$ 0.65 per share – the same price it paid to former lead shareholder Li Zhi Da – but the offer wasn’t taken up as KVB shares remained well above the HK$ 0.65 level and CITIC refused to budge and move its bid any higher. KVB shares have been hovering just above the HK$ 0.65 level for most of 2016.
KVB’s full Q2 financial report can be seen here.