I just posted the following comment on the KPG comment list. But...

I just posted the following comment on the KPG comment list. But I would like to hear any views from PFG investors who also have a view on this valuation differential, and whether it can be sustained long term.

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I'm an investor in PFG, an accounting and financial planning business. PFG s/p has increased by ~25% in the past week, due to both a strong operating update and (I suspect) market interest associated with KPG. However, despite the s/p increase, PFG remains valued at about half that of KPG (see table below). PFG doesn't have high profile investors, but has a long track record of operating in the public markets and is currently recording strong growth. PFG revenues are weighted more heavily towards FP revenues compared with KPG, however PFG has a large accounting business and recent acquisitions, which will drive further growth in FY2018, are in the accounting space. PFG also has a well developed FP business to leverage its accounting customer base.

So the question is, why the significant valuation difference. My expectation (albeit I'm a biased holder), is that PFG has commenced a rerating which will drive its valuation towards KPG, but I'm keen to understand whether there is something particularly unique in KPG that justifies its materially higher valuation. Anyone have a view on this?

	Column 1	Column 2	Column 3
1		KPG	PFG
2	Share price	1.42	0.165
3	Shares	45.3	179.5
4
5		FY17E	FY17E
6	EBITDA	5.5	4.8
7	NPATA	3.4	3.5
8
9	Mkt cap	64.3	29.6
10	Net Debt	13.2	8.3
11	EV	77.5	37.9
12
13	EV/EBITDA	14.1	7.9
14	P/E	19.1	8.5