KVB Kunlun forecasts decrease in FY2017 net profit
Increase in referral fees, administrative expenses and lower cash dealing income weigh on profitability of the Hong Kong FX broker.
Retail Forex broker KVB Kunlun Financial Group Ltd (HKG:6877) is forecasting a year-on-year drop in profits for the year to December 31, 2017.
In an announcement published earlier today, the broker said it expects to record a decrease in net profit for the Relevant Year as compared to the net profit recorded for the year ended December 31, 2016. The drop in net profit is mainly attributable to higher referral fees and other charges mainly caused by the increased commission rebate to external parties, as well as the decrease in cash dealing income which reflects a decline in trading volume in cash dealing business and revaluation loss on open positions as at December 31, 2017. An increase in administrative expenses mainly due to higher marketing expenses, customer handling fee expenses and computer services expenses also contributes to drop in net profits.
KVB Kunlun is expected to post its annual results for the Relevant Year no later than March 31, 2018.
The broker has recently transferred its listing from GEM to the Main Board of the Hong Kong Stock Exchange.
Back in August 2017, when the Board of KVB Kunlun first announced the planned transfer, the company said it believes that the listing transfer will enhance its corporate profile. This will, in turn, add to the competitive strength of the group and boost the confidence of its investors and stakeholders. The Board said it also expects that the Main Board trading platform will enhance the trading liquidity of the Shares as well as the fund raising capability of the Group.
The Board noted back then that that it has no immediate plans to change the nature of the business of the Group following the Transfer of Listing.
In November last year, KVB parted ways with Mr. Ng Chee Hung Frederick who has resigned as an executive director of the company. Following the resignation of Mr. Ng as an executive director of the company, he has also ceased to be the compliance officer of the company and its authorised representative. Mr. Ng has stressed that there is no disagreement between him and the board of directors of the broker.
