In June, Gmarket (NASDAQ:GMKT), an e-commerce company, priced its IPO at $15.25. So far, it has had a good start -- especially in light of its recent earnings report last week, in which the stock price surged 19% to $20.90. The company has a stranglehold on the South Korean market, which continues to grow at a rapid pace.

In the third quarter, the company's revenues surged from $19.3 million to $43.5 million. During this time, earnings increased from breakeven to $0.11 per share, or $5.7 million. Moreover, the company generated $15.4 million in cash flows from operations.

Founded in April 2000, Gmarket is now the top e-commerce marketplace in South Korea. The website has more than 1.7 million products listed for sale, covering a wide variety of items including computers, jewelry, beauty products and even furniture. What's more, Gmarket offers different options to conduct e-commerce: fixed-price, negotiation, group buying, and auction.

While transaction fees are the biggest part of Gmarket's revenues ($27.6 million in the third quarter), the company also has a thriving advertising business. In the third quarter, these revenues were $15.9 million, which was a 369% increase from the same period a year ago.

Another positive sign: Gross margins increased from 45.4% to 52.3% on a year-over-year basis. In other words, Gmarket is not sacrificing profitability for sales growth -- which is not an easy thing to achieve.

Then again, South Korea is a lucrative market and is at the leading edge of Internet technologies (for instance, the broadband penetration rate is about 68.4%). And according to the Korea Information Strategy Development Institute, the growth prospects for e-commerce look particularly bright. The forecast is from 7.8 trillion won (the South Korean unit of currency, equivalent to approximately $8.3 billion) in 2004 to 14.6 trillion won ($15.5 billion) in 2008.

True, it's not uncommon for recent IPOs to see their prices fall off after the hype subsides - but that does not appear to be the case with Gmarket. In fact, with the Christmas season upon us, Gmarket's growth should continue. With an investor such as Yahoo! (NASDAQ:YHOO) buying about 10% of the company, this is one company I wouldn't bet against.

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Fool contributor Tom Taulli does not own shares mentioned in this article. He is currently ranked 35 out of 12,912 in CAPS. The Fool has a disclosure policy.