bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Samuel Yeung

Brokerage Karl Thomson Holdings plans to issue 52.5 million shares to raise about HK$54 million next month through a main-board listing.

The proceeds would be used to develop the online trading and margin financing business and set up new branches, the company said yesterday.

Karl Thomson operates two branches with about 2,500 active clients. Its main revenue comes from stock brokering commissions.

Based on its net profit of HK$42.61 million in the year to March 31, the issue price would represent a price-to-earnings ratio of 5.3. This, according to chairman Johnson Lam Kwok-hing meant the price was 'a bit low' compared with the industry average.

Questions were raised at the briefing about the company's past compliance failures.

According to its prospectus, the company and its affiliates had breached various regulations during the past three years.

One such breach occurred last September, when the company allowed a third party to sell stocks on behalf of a client before it had any written authorisation from the party involved.

As a result, the company received a warning from the Securities and Futures Commission, the prospectus said.

'We have adopted some remedial measures in response to the problems,' Mr Lam said yesterday.

Also, the prospectus revealed the company had sold its three million shares in Hong Kong Exchanges and Clearing.

These were its quota from the March merger of the stock and futures exchanges and their associated clearing houses.

Based on the prospectus indication of a gain of HK$23.5 million from the share sales, the average selling price would have been about HK$7.83 per share, significantly less than yesterday's close of HK$16.55.

Mr Lam did not comment on whether he considers the share sale to be badly timed.

Dealing in Karl Thomson's shares begins on September 8.



Karl Thomson sets main-board issue price below industry norm