Kingsway International Reports Financial Results for the First Quarter Ended
September 30, 2010

TORONTO, Nov. 12 /CNW/ - Kingsway International Holdings Limited (TSX: KIH), ("Kingsway" or the "Company"), Asian based financial services firm, today announced its financial results for the three months ended September 30, 2010.  All figures quoted are in U.S. dollars unless otherwise specified.

The financial performance for Kingsway International Holdings Limited and its subsidiaries (collectively the "Group") for the first quarter ended September 30, 2010 showed a significant improvement as compared to that in the same quarter last year.  With the ample liquidity in the Hong Kong market, Kingsway enjoyed a better performance in the current period.  The Chinese economy continues to be a growth driver in the global economy.  The new quantitative easing initiative launched by the US Federal Reserve and the continuing devaluation of the U.S. dollar provided strong support to stock markets. 

Financial highlights for the first quarter include:

• Net income was $0.6 million, or $0.0063 basic earnings per share, compared with a net loss of $2.0 million, or $0.0252 loss per share, for the same quarter last year;
  
  
• Trading income from financial assets held for trading was $2.6 million, compared with a trading loss of $0.2 million for the same period last year;
  
  
• Revenue from services and other income was $3.1 million, compared with $3.3 million for the same period last year;

Financial Results for the First Quarter

Total revenue increased significantly to $5.7 million in the current quarter, from $3.1 million in the same quarter last year.  Trading income from financial assets held for trading of $2.6 million was recorded in the quarter, compared with a trading loss of $0.2 million for the same period last year. The improved performance was attributable to the recovery of the Hong Kong stock market.  Revenue from services and other income decreased slightly to $3.1 million in Q1 of FY2011 from $3.3 million in Q1 of FY2010, mainly due to the decrease in market turnover and equity capital market transactions in the current quarter.   

Selling and administrative expenses decreased to $4.5 million in the current quarter from $4.7 million for the corresponding period last year, mainly due to the decrease in the exchange loss arising from the Company's convertible debentures and the decrease in variable staff costs as a result of the decrease in commission income in the current quarter.

Net income of $0.6 million, or $0.0063 basic earnings per share was recorded in the current quarter, compared with a net loss of $2.0 million, or $0.0252 net loss per share for the same period last year.

Segmented Results of Operations for the First Quarter

	Brokerage $'000	Corporate Finance & Capital Markets $'000	Asset Management $'000	Investment in Securities $'000	Structured Investment $'000	Corporate and Other Activities $'000	Total $'000
Commission & fee income	1,828	289	-	-	-	285	2,402
Interest and other income	84	90	-	289	-	215	678
Trading (loss)/income	(16)	-	-	2,427	167	-	2,578
	1,896	379	-	2,716	167	500	5,658
Inter-segment revenue	15	-	-	-	-	565	580
Selling and administrative expenses	(2,378)	(784)	(17)	(169)	(314)	(1,377)	(5,039)
Share of profit/(loss) on investments subject to significant influence	6	-	-	-	(61)	-	(55)
Other expenses	(29)	(5)	-	-	(5)	(59)	(98)
(Loss)/income before income taxes and non-controlling interests	(490)	(410)	(17)	2,547	(213)	(371)	1,046

• Brokerage
  
  Revenue decreased to $1.9 million for the first quarter, compared with $2.2 million for the same period last year, mainly due to the decrease in market turnover in the current quarter.
  
  Overall, the division recorded a loss of $0.5 million for the quarter, compared with $0.1 million for the same period last year.
  
  
• Corporate Finance & Capital Markets
  
  Total revenue of the division for the quarter decreased to $0.4 million from $1.2 million for the corresponding quarter last year, mainly attributable to the disposal of the division's unlisted derivatives and the related securities after exercising the derivatives in FY2010.
  
  An overall loss of $0.4 million was recorded for the quarter, compared with an income of $0.5 million for the same period last year.
  
  The division is working on several projects which includes sponsoring IPOs for listing on the Stock Exchange of Hong Kong.  It is expected that the division is likely to achieve a growth in revenue in the current year upon the completion of the listing of these IPO clients.
  
  
• Asset Management
  
  The division is now looking to set up new private equity funds.
  
  The division recorded an overall loss of $0.02 million for the quarter, compared with $0.06 million for the same quarter last year.
  
  
• Investment In Securities
  
  The division changed its investment strategy and disposed of several investments during the quarter.  Revenue of $2.7 million was recorded for the quarter, compared with negative revenue of $1.0 million for the same period last year.  The improved performance was a result of the recovery of the Hong Kong stock market.  The division is currently looking for other suitable investment opportunities.
  
  Overall, the division recorded an income of $2.5 million for the first quarter, compared with a loss of $1.1 million for the corresponding quarter last year.
  
  
•  Structured Investment
  
  In July 2010, the Group acquired through a private placement offering approximately a 30% interest in Salmon River Resources Ltd. (TSXV: SAL) which is engaged in the evaluation, acquisition, exploration and development of gold and base metal mineral properties in Australia.
  
  The division recorded an overall loss of $0.2 million in the current quarter, compared with $0.1 million in the same quarter last year.
  
  
• Corporate and Other Activities
  
  The division recorded an overall loss of $0.4 million for the quarter, compared with $1.2 million for the same period last year.  The decrease in the loss was mainly due to the write back of a provision for impairment losses of receivables on the disposal of an investment and the reclassification of the exchange loss related to the Company's convertible debentures to Structured Investment segment in the current period.

Dividends

At the meeting held on September 17, 2010, the Board proposed a final dividend for fiscal year 2010 in the amount of Canadian Dollar 0.02 per common share that will be paid on or about December 2, 2010 from retained earnings.

Outlook

The Company continues to believe in the strength and growth of the Chinese economy.  As China develops, it is creating its own substantial consumer market.  This consumer market continues to be driven by the increase in the urbanization of its population and the growth of its middle class.  As a result, China is decreasing its dependence on foreign exports as a key driver of its economy.  Exports while continuing in importance are gradually being replaced by domestic demand as a growth driver of the Chinese economy.

The Strategic Investment group established in FY2009 continues to focus on the natural resource sector, in particular mining and energy as the Company believes these sectors while important to China today, will be even more strategic in the future. 

Internally, Sun Wah Group, a prominent Hong Kong conglomerate controlled by Dr. Jonathan Choi, Chairman of the Company, has now entered into arrangements to increase its holdings to approximately 70% of the current outstanding equity of the Group through the acquisition of shares from an existing shareholder.  Sun Wah Group's support, through several placements, has been crucial in the implementation of the Company's current business plan.

It is believed that the changes which have been instituted in the Company and are now being initiated throughout the Group, will have a major positive impact on the growth of the Group and the creation of value for the Shareholders.

It is believed that the Group is well positioned to benefit from the continuing strengths of the Chinese economy. 

About Kingsway International Holdings Limited (TSX: KIH)

Kingsway is a strategically positioned asset-based financial services provider, linking the global investment community with the PRC's high growth economy.  The Group is now positioned into three integrated divisions: Capital Markets Group, consisting of brokerage and financial services, including investment banking; Strategic Investment Group, a merchant bank focused on mining and natural resources; and an Asset Management Group specializing in private equity funds.  The Group's primary subsidiary, SW Kingsway Capital Holdings Limited ("SWK"), is based in Hong Kong and listed on The Stock Exchange of Hong Kong. The SWK group comprises the Group's primary operating subsidiaries and is licensed to provide a range of financial services.  The Group operates from five offices located in Hong Kong, Beijing, Shanghai, Shenzhen and Toronto.

China is widely recognized as an increasingly important player on the world's financial stage. As the country continues to grow, its greatest needs will lie in energy and resources.  Following a recent restructuring, Kingsway is positioned as a middle tier provider of financial services in these sectors and an opportunistic investor in these and related sectors.  The Group's strategy is to use investment activities strategically to generate advisory services revenue while creating value for its shareholders through asset accumulation.

Leveraging a 20-year track record and significant relationships throughout Asia, Kingsway continues to operate as a China focused multi-discipline asset based financial services firm, with a focus on natural resources, infrastructure and real estate.

Founded in 1990, Kingsway is listed on the main board of the Toronto Stock Exchange under the symbol KIH.

For more information on Kingsway's core business and new strategic direction, please visit the Company's website at www.kingwaygroup.ca.

Forward-Looking (Safe Harbour) Statements

This press release contains forward-looking statements that are based on the beliefs of Management and reflect the Group's current expectations.  In certain cases, forward-looking information can be identified by the use of words such as "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may", "should", "will", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information.  There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, investors should not place undue reliance on forward-looking information.  Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

For further information:

Gary Quedado, Kingsway Group, [phone] Ext. 238, [email protected]