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Monday, September 11, 2017

N2N - Technical Analysis Since IPO

This blog post will be mainly discuss about the pass historical technical chart of N2N (0108) until today, how it evolve and how much it worth going in future.

From HISTORICAL Technical Chart

We Found RISK REWARD is SUPERB ! Read till finish to find out why !

If you haven't read about my blog about N2N introduction and it's fundamental analysis, you can go to link below:

http://bursalogicanalysis.blogspot.my/2017/08/n2n-market-know-how.html

http://bursalogicanalysis.blogspot.my/2017/09/n2n-fundamental-analysis-lta-style.html


From my findings, N2N listing IPO date estimated to be 25-11-2005, which almost 12 years in BURSA! 

Of course this company have long journey and history and riding on a roller coastal faith as it goes through the financial crisis in year 2008. We can see from the chart below:


Since IPO price of RM 0.41, price start moving up to as high as RM 2.53, and close highest at RM 2.49 in year 2017. Just two year after IPO price manage to Super Meletup up simply due to that time not much technology stock that listed in BURSA I assume.
(This price is already adjusted due to 1:1 Bonus issue in 2007, and right issue in year 2013.)


Zoom in year 2005 to 2007, we can see N2N riding on a SUPER BULL rally, as that time market also very bullish. Especially when it break RM 1.00, the price push up much more faster than before.


But this rally not just due to world market bullish, we found out that it's also simply due to profit has been increase strongly after 2 years of IPO.


We can see the company before IPO already improving in their profit, in year 2005 net profit at RM 1.8 million, in year 2006, one quarter already RM 3 million +. That's the obvious reason why N2N bullish that time. 


What's the great product make them so bullish? During that time, actually not much trader trade online, mostly offline, where their software mostly for Remisier, Bank Dealers, Institute and maybe some advance trader. 


We can obviously see that, during that old times, they still use PDA phones, even SMS still use, however over time, they manage to improve all this system which din't make them fail until today still survive.

What happen after the bull run of 2005-2007? Financial market crash. 


We can see a huge damage and waterfall from year 2007 to year 2012. 


It's pretty obvious during that time almost all company not doing well, highly impacted by world financial crisis causes by the collapses of Lehman Banks. This is tough time for N2N because bank business not doing well, same to stock market trading activities has been slow down very much.


I dig out the quarterly report of year 2nd quarter 2011, surprisingly notice that although they are not making profit for almost 2.5 years, they still manage to stay nett cash without much debt, even until now.

Recovery plan on the go !

The company manage to overcome the crisis and go stronger with new product call TCPro Application. (should be more advance and useful compare to before, and have been widely used by many banks and traders now)


We can see a strong recovery after implementation of TCPro in second half of 2011, and financial stock market also start recovery. After Malaysia Election year 2013 over, our market turn bullish in year 2014 and price also spike up. During this time, online trader also started to actually growing faster and more than before.

During 2014 stock price already ever hit high of RM 1.10, and in 2016 also ever hit high at RM 1.07.


We can see from profit, year 2012 start to improving until today year 2017


We can obviously see in year 2016 profit already double compare to the profit in year 2014.


We can see annual profit of 2016 already double year 2013 and 2014, however if we look at the stock price below, it's highly unmatched as the profit grow but price stock stay undervalue.


Very obvious that during year 2014 price have peak, but in 2016 stock price performance fail to overcome year 2014 even though profit have double.

What's next? What can we tell from all the story above? 

N2N price already undervalue and not yet moving in tandem with latest profit which show potential of future growth !

RISK REWARD is extremely good ! 

By using the average of two years price from 2014-2017 = RM 0.84

By using the future potential and half of historical price from RM 1.00 to RM 2.49 = RM 1.74
(Because historical tell us after break RM 1.00 price will super bullish)

Current price RM 0.95. 

Risk       RM 0.95 - RM 0.84 = RM 0.11   <Potential lose>
Reward  RM 1.74 - RM 0.95 = RM 0.79  <Potential gain> 

Look at the chart below, will TEN YEAR BULL CYCLE FINALLY COME BACK !?
I guess the company has prepared everything for it !


Once breakin RM 1.00 then brake might be rosak ! Be sure Melabur Sampai Meletup

Don't chase after Meletup !

Risk of lose is only RM 0.11 cent but potential gain is at least RM 0.79 ! Ratio 1:7 !

Since we all already know N2N is growing and after acquire AFE Solution Ltd, their profit definitely can grow much faster, therefore the risk of falling should be very limited !


As a conclusion,

1. N2N is a growing company that still undervalue.
2. Technically has not been perform much compare to fundamental.
3. N2N after break RM 1.00 will have super rally.
4. Risk Reward is very good for investing in N2N.
5. N2N technologies growing well with future development.

Again I further increase my short term hope to reach RM 1.20, mid term hope RM 1.74, long term hope RM 2.50.


2 comments:

  1. technical-analysis is a trading tool employed to evaluate securities and provides accurate forecasts which are prepared by expert technical analysts.

    ReplyDelete