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Monday, August 28, 2017

N2N Connect Bhd - The Market Know How

N2N (0108) have come into LTA radar finally because it's time for this ACE stock Gem unlock their potential fully. Why I said so? Because this company again fulfilled all my criteria to be a Meletup Stock !

At first let us understand what exactly this company doing. You can view their website
http://www.ngnconnection.com/ , http://www.n2nconnect.com/.

To make it simple and easy to understand, one of the core business is providing stock trading platform, solutions, services.

" N2N markets its core enterprise-wide integrated e-commerce securities trading solutions to local stock broking firms and banks. It also focuses on online transactions with emphasis in the capital market segments. N2N’s products and services range from online trading portals within the stock broking industry, hosting and managing network services, to wealth and risk management solutions."

This company have been started in year 2000 which almost 17 years, although their website din't show who their main customer in Malaysia, but roughly we know few bank like CIMB, AMBANK, AFFIN and some other are using their platform.

In Malaysia, we can say that only a two public listed company providing such service, N2N and EFORCE.

We don't have to say about EFORCE as we know that EFORCE valuation already quite rocket and last year has been a big bull goreng up. And even after bonus still doing quite well in term of stock price.That's why we see big Potential in N2N too.

Let us look at latest quarterly report, we found something that we always like :

Their business not just in Malaysia, but also Singapore, Indonesia, Phillipines, and lately newly added Hong Kong, Macau and Vietnam after acquired AFE Solution Ltd (we will go into more details about this company later) on 31 March 2017.

This is one of the main consent to see whether this company are sole depending on Malaysia only, or well expanded to other country. Since their business already grow well to other country, this remind us about MYEG, GHLSYS, REXIT which also expanded to other country and doing very well, because if only make business alone in Malaysia is not good enough for growth.

For Financial background, I can conclude it's a Nett Cash Company !!
For details can you go to this blogger to read HERE <--

Look at the latest quarterly result, revenue triple up ! Profit triple up ! Why is this growth so much !

Now just the beginning of what we want to share. It's all coming from this newly acquired company AFE Solution Ltd and how potential is this company?


From link above, we learn that :

"AFE is a financial data and trading solutions provider with regional presence in Hong Kong, Macau and Vietnam. "

“The financial market in Hong Kong is huge with over 500 brokerage firms. AFE is among the top three [trading solutions] providers there. We bought AFE for their market share. Through AFE, we will have a good presence in Hong Kong, Macau and Vietnam."
“AFE’s strong presence in Hong Kong will also serve as a springboard for our expansion into China, with the Shenzhen-Hong Kong stock-trading link kicking off soon,” said Tiang. According to news reports, the trading link, dubbed the Shenzhen-Hong Kong Stock Connect, is slated to open on Dec 5. (SHENZHEN-Hong Kong already kick off)"
We know that AFE is already a very strong trading Solution Company, do you curious on its client?

Wow such a long list, so much client and many are big Bank in CHINA and Hong Kong. By just looking at their client already know this company have a very strong background and high profitability in future !

How much
AFE estimate each year can contribute to N2N ? From this link, we learned that AFE last year make great profit of HKD 14 million. Equal to RM 7.63 million a year. 

"Besides helping N2N Connect extend its regional presence, the acquisition of the 34-year old AFE, which registered HK$110 million in revenue with HK$14 million profits in 2016, combines core technologies from two leaders in the field of capital and financial markets with AFE owning a number of intellectual property in data streaming and back office systems."


What is the idea of RM 7.63 million a year for N2N ? 

Again we refer back to this quarterly result history.

We show you what is the impact of extra RM 7.63 million gain !

Approximately N2N each quarter only make roughly RM 2-3 mil Max a quarter.

Total earning last year was RM 11.37 million.

And now each year gain extra RM 7.63 million.

This equal to RM 7.63 / RM 11.37 = 67 % Extra

What is the meaning 67 % extra ? Which mean the company every year earn estimate extra 67 % !

This mean stock price also should at least up 50 % ? What if AFE contribute more this year?

This year stock market definitely hot than last year. As specially Hong Kong market big bull now !

Let us look at some stock that recently also acquire new company : KRONO

KRONO after acquired QUANTUM Storage last year, then it goreng up so high 5 time up from RM 0.20.

Lets us look at N2N stock price :

We can see it has been strong sideways at range of RM 0.70 - RM 1.00. Since result has been strongly improved, I believe it can break the resistant of RM 1.00 very soon.

We check the latest quarterly result propects:

We notice N2N is still growing their service to other country and they actually also involved in Data Services similar like KRONO which people are crazily like it and goreng it.

We all know that Data Centre services is important now, therefore again we see this N2N have a lot potential in future.

Not only that they also providing those network securities, and many other IT solution. Can check it here: http://www.ngnconnection.com/

What's more?


N2N is the very few profit making and stable business and potential growth ACE MARKET stock that already hit requirement to move to mainboard.

Again I see a lot potential in this company and bright future, I hope you can see it too.

As a Conclusion:

1. N2N is doing International Business.
2. N2N business in Malaysia almost consider Monopoly business as very High Barrier.
3. N2N claimed themself as Asia’s largest one-stop service provider in the financial investment industry.
4. N2N is a nett cash company.
5. N2N stock price still din't really perform much over the years but profit improved.
6. N2N business fit with current market needs, online solution, data, IT.
7. N2N earning improved a lot after acquired AFE Solution LTD.
8. N2N still list at ACE market, which potential transfer to Mainboard in future.
9. N2N technically bullish with volume, sign of black horse awake.

My own personal "hope" for short term price to reach RM 1.05, mid term hope RM 1.30, long term hope RM 2.00.