Dear All Existing Investors and Potential Investors,

Today I would like to share with you my second long term FA counter named N2N Connect(0108). I believe N2N is not something new to you especially when you hear about "Mini Bursa". 
For those who do not want to invest BURSA(1818) at current price of RM7-RM8, N2N(0108)-RM0.900 may be an attrative alternative for you. 

This analysis will cover Introduction, SWOT analysis, key facts, top management direction, hidden opportunities and conclusion. 

1) Introduction 
2) SWOT analysis 
3) Key ratios 
4) Top management direction 
5) Hidden opportunities for long term investment 
6) Conculsion 


111111111111111 Introduction 1111111111111111 
N2N Berhad is a leading provider of e-commerce and mobile commerce solutions for securities trading, N2N is fast paving its own niche in the stockbroking solutions industry. 
#The company's eBrokerConnect online trading engine is licensed by major brokerage firms and banks in Malaysia that wish to offer their customer the ability to trade directly in the stock market using their internet-enabled computers, mobile phones and personal digital assistants-without having to go through a personal broker for each trade. 
#The group's main products include eBrokerConnect which carries subsystems such as PortfolioConnect. Bank Connect, ResearchConnect, eIPOConnect and GlobalConnect. The m-commerce solutions also offered by the company under MobileConnect and SMSConnect applications. MobileConnect enables mobile or wireless equity trading via PDA's and smart phone that operate on WIFI, GPRS, 3G as well as 4G. Besides, the SMSConnect is a software application developed to provide online stock or trading information as well as to facilitate trading transaction via SMS. 
#Since its founding in 2000, N2N has earned numerous industry accolades. It was listed on KLSE on 28-Nov-2005 with a IPO price RM0.41.(Note: N2N has evolved into the intergrated financial trading platform player). 
## LARGEST MARKET PLAYER- N2N has a market share of almost 70% of the investment banks and brokerage companies in the country. N2N has been engaged by more than 15 brokerage houses to implement the replacement of BURSA MALAYSIA's Broker- Front-to-End trading operation. This young and aggresive company has more than 4,000 terminals, comprises a total of 62% of BURSA MALAYSIA terminals and have secured a major contract with Philippine Stock Exchange(PSE) to implement their entire exchange involving 205 brokerages houses. 
-------EXCHANGES business------- 
1)Bursa Malaysia Securities 
2)Singapore Exchange Securities 
3)Saudi Stock Exchange (Tadawul) 
4)Jakarta Stock Exchange (JSX) 
5)The Stock Trading Center of Vietnam (STC) 
6)Philippine Stock Exchange (PSE) 
-------MALAYSIA'S e-Broking business------- 
1)Aseambankers 
2)CIMB Bank 
3)Citibank 
4)Maybank 
5)AmFraser 
6)AmSecurities 
7)Apex Securities 
8)CIMB Securities 
9)HWANGDBS 
10)Kenanga Investment Bank Berhad 
11)PM Securities 
12)SJ Securities 
13)Macquarie 
14)AffinTrade 
15)TA Securities 

2222222222222222 SWOT Analysis 2222222222222222 
{{Strength}] 
- Experienced management team to spearhead growth 
- First mover advantages in e-Broking business 
- Largest market share(70%) in Malaysia's online trading platform & estimated 1.1 million clients 
- Largest operator (4000 terminals)which is 60% from Bursa Malaysia 
- Largest Exchange trading platform provider (200 brokerage houses) in Philippine Stock Exchange 
- Strong synergy through "Strategic Business Alliance" acquisition in Japan's media heavyweight NIKKEI CORP and QUICK CORP 
- Strong recurring income stream from every matched trade order that is routed through its online trading system 
- Strong R&D team for cutting edge Cloud technology 
- Competitive advantage in Cross-border InterBrokerage system 

{{Weakness}} 
- Dependence on e-Brokering business 
- Limited ICT sound R&D specialist 
- Dependence on investment sector; less diversified portfolio 
- Fluctuate NET INCOME; long term investor distraction 
- Giant investment capital for server maintenance and speed accelerator 

{{Opportunities}} 
- Growing numbers of online traders globally 
- Obtaining market capital through global market acquisition 
- Competitive online trading fees vs conventional trading fees 
- Technological evolution expedite Baby Boomers to use e-trading 
- Over take Bursa as the prime real time portfolio management system for online trading 
- "Bloomberg of Asia" - The Region's largest financial information provider 

{{Threats}} 
- Comepetition from ExcelForce (EFORCE: 0065) 
- Antitrust law enforcement 
- Foreign exchange risk 
- Software cost increase by Citrix Company 
- Government regulation "trading info tracking"- threat to traders 
- Currency risk 
- Increase of hardware price 

3333333333333333 Key Facts 3333333333333333 
In order for long term improvement, I would like to compare this long term FA stock with the much more experienced peer,Excel Force (EFORCE: 0065). 
A) Revenue (RM,000): 
~~~~Year EFORCE vs N2N 
~~~ 2013 20,626....31,327 
~~~ 2012 28,361....26,611 
~~~ 2011 16,052....20,724 
~~~ 2010 13,382....14,948 
~~~ 2009 12,118....12,271 
Remarks: Year on year basis, N2N's REVENUE GREW 17.72% while EFORCE grew 12.33% 

(source: http://www.malaysiastock.biz/Corporate-Infomation.aspx?type=A&value=N&securityCode=0108)

B) Net Income (RM,000) 
~~~~Year EFORCE vs N2N 
~~~ 2013 7,001....6,041 
~~~ 2012 5,257....1,789 
~~~ 2011 6,046....-1,350 
~~~ 2010 5,363....-6,474 
~~~ 2009 6,171....-21,547 
Remarks: Year on year basis, N2N's NET INCOME surged up 237.83% due to the effectiveness of turnaround project and profiting from newly introduced online trading platform managemnent system. 

C) N2N has recorded a Gross margin-59.21%; Net Profit Margin-20.66%; Operating Margin-24.71%. However, the ROA & ROE was lower at 9.61% & 14.23% and EFORCE was 14.02% & 17.71%. 
Remarks: The double digits net profit margin is in line with its peer industry. However, the current ROE of 14.23% should be improved to compete with peer's performance. 

D) Earning Per Share (RM cent) 
~~~~Year EFORCE vs N2N 
~~~ 2013 3.38....2.01 
~~~ 2012 2.55....0.59 
~~~ 2011 2.92....-0.45 
~~~ 2010 3.75....-2.24 
~~~ 2009 5.45....-7.22 
Remarks: Year on year basis, growth in earning per share increased 215.37%. The five year annualized earning per shares growth ranks HIGHEST in its industry. 

E) Cash flow 
~~~~Criteria---------------EFORCE vs N2N 
-CashFlowPerShare----------0.0462....0.0369 
-Price/Cash flow per share--14.06....32.75 
-Book value per share------0.1942....0.1649 
-Tangible book value-------0.1546....0.1280 
Remarks: The company is in healthy financial condition and able to score positive in business sustainability. 

F) Debt ratio 
~~~~Criteria--------------EFORCE vs N2N 
-Total debt/total equity--0.1967 vs 0.3019 
-Total debt/total capital-0.1640 vs 0.2319 
Remarks: Both company has logical value in debt ratio and inline with the industry benchmarking of 0.50 (total debt/total equity). After the screening of long term investment for N2N, it is heartening to assume N2N is aggressively financing the rapid growth with DEBT. 

4444444444444444 Top management direction 4444444444444444 
International experts like to call N2N Connect as Asia Bloomberg after its venture into Japan's most largest information financial business. In Malaysia, investors like to call N2N Connect as Mini-Bursa because it will eventually take over the Bursa's service platform to provide trading database and online management system. Should you agree, Bloomberg is a US-based company which started with financial information provider way back in 1980 and has evolved into becoming a leading global financial media organisation and was ranked-42th on the Forbes America's Largest Private Companies List. I strongly believe that "WHY DREAM LITTLE, WHEN YOU CAN DREAM BIG". The N2N Founder Mr Andrew Tiang is a brilliant, far viewed, innovative, passionate and super DARING entreprereneur. Andrew Tiang, aged 42, started his career as a programmer in a accounting & software company and WAS PRMOTED to SENIOR CONSULTANT at the age of 25.(hahaha...duit is cleaning the floor at the age of 25 & 26yrs old till present). After 6 yrs he resigned and joined Citibank N.A South Asia as the Head of IT audit section of the regional audit division. He quickly became a remarkable person in ICT line when he was awarded the BEST IT AUDITOR for Asia Pacific Region after the subsequent year. He has assumed the role of MD at Computer Associates Pte Ltd in Malaysia and Regional Director at i2 tech Pte Ltd. 
$$$$$$$$$ WHY DREAM LITTLE, WHEN YOU CAN DREAM BIG $$$$$$$$ 
Mr Andrew Tiang began his entrepreneurial pursuit by founding N2N in year 2000 and then listed the company on November 2005. The company long term plans are always aligned to the Vision to SERVE INVESTORS ANYWHERE IN THE WORLD TO TRADE IN ANY MARKET OF THEIR CHOICE THEY WANT, ANYTIME. 
N2N's top management is strategically invest the company with substantial amount into creating new products and a service channel leading to Bloomberg-like services eventually. 

The top management is ensuring its leadership in the industry. It can be seen when they developed and launched the sophisticated programme known as "STRATEGY OPTIMISATION ACCELERATOR", which is to ensure that the latest programme is not easy to be emulated. 

Besides, N2N Connect is also working closely with its prime software developer-Citrix NetScaler to seal the potential business opportunities from cross-border InterBrokerage services. Again, Andrew Tiang is fully utilising the competitive advantages of optimized bandwidth, enhanced customer experience, lower cost of investment, improved user response time and most importnat Multiple features in ONE BOX to enable every cross-border trading business. Mr Andrew has highlighted their company direction to deliver applications to any trader in any trading situation with the FASTEST PERFORMANCE, HIGHEST SECURITY, LOWEST BROKERAGE FEES and of course BEST USER EXPERIENCE. 

555555555555 Hidden opportunities for long term investment 555555555555 
The world of technology is changing at an ever-increasing pace. Some say YES while some complain to about it. Today users and applications are moving apart.The increasing of distance between users and applications have caused the difficulties and growing challenge in business, not just one dimension but across physical. technical and organizational. I strongly believe no matter how fast computing evolves, the pace of change is faster still accross all three of these dimensions. 

Online trading companies are struggling to keep up the pace of ongoing transformation. N2N Connest has ruled out several strategies to "shape and reshape" to "penetrate and capture" in order to turn every single end user problem into business opportunities. The e-Broking and e-commerce business are getting bigger and bigger because: 
1) Baby Boomers brought IT to where it is today, now their new generation the Echo Boomers, Gen X and Gen Y & Echo GenY/Z are likely talking computing to new heights of user freedom and control 
2) Distruptions caused by disasters are increasingly common so online electronic transaction will reduce the risk from physical aspects. 
3) Globalization is shifting work to where the talent lives and N2N has no excuse not to tag along with the talent pool 
4) Consolidation is rampant as industries and companies seek to squeeze out cost so it will bring great opportunities to a well established yet competitive cost driven company-N2N Connect. 

We are the trader, we are the end user and we are fully aware of that more workers continue to work in more ways in more places, the ability to deliver any trade transaction anywhere, to any server who control it, with the least lead time, fastest performance, highest security become a crucial decisive and even critical factor. As a result, users are becoming more and more decentralized and ALL IN A BOX solution (like what N2N offers are) becoming more centralized (hidden opportunities for investment) to lower management costs. 

ANother hidden opportunity to be revealed is the above mentioned "Strategy Optimization Accelerator". This development is certified by the company to be able to process a large amount of data, or Giga Tera Peta data in much cheaper price with a wider reach. It would be the MAGIC Product from N2N to compete with all the competitors. The selling price is about RM25,000 compared to a competitor's common price of RM20 million. WHY? WHY? WHY? Don't trust magic? YES, I do not trust Magic as well. The latest technology is built on the foundation of GPU(Graphics Processing Unit)which made up of more than 1,000 core processors with the ability to process massive data without compromising on stability. And fantastic news is the GPU is incorporated with a programmed algorithms that is able to process numerous stocks/securities wwith a single instruction to track the TA chart to come out with our BUY/SELL Call. In future/currency trading the so called robotic algorithms can perform the "job" in minimal supervision.(AGAIN just RM25,000 investment cost). 

Currently, N2N has market presence in Malaysia, Singapore, Indonesia, Thailand and joint partner operations iin Thailand, Vietnam, Saudi Arabia, Kuwait and United States. This can help to leverage the competencies and benefit from technology transferation process. 

More and more global opportunities will be explored by the key management to reward shareholders with attractive dividend yield. 



6666666666666666 Conclusion 666666666666666 
Everything looks good. Totality  N2N Connect starts to perform well since 2012 as we can observe from the key facts such as revenue, net income and earning per share. However, currently they do not beat EFORCE mainly because of fresh recovery from losses from 2009-2011. We like to see N2N Connect to over take EFORCE and in future to take over most of the e-Broking companies in this region. The are in the midst of taking over Bursa's database information provider poftfolio. I believe in current top management that one day the company can compete with Bloomberg and standing in the eyes of the world. Lastly, with this high potential and explosive counter you will be rewarded with handsome "share price appreciation" and "dividend yield'. 

Invest in good FA stock so you can sleep well over the weekend and off-trading days! 

Happy reading and warmest regards, 
duitKWSPkita