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N2N

N2N Connect Berhad KLSE:N2N Stock Report

Last Price

RM0.46

Market Cap

RM259.6m

7D

-1.1%

1Y

-42.1%

Updated

01 Jul, 2022

Data

Company Financials +
N2N fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance2/6
Financial Health6/6
Dividends3/6

N2N Stock Overview

N2N Connect Berhad, an investment holding company, engages in the research and development of software packages in Malaysia, Hong Kong, and internationally.

N2N Connect Berhad Competitors

Price History & Performance

Summary of all time highs, changes and price drops for N2N Connect Berhad
Historical stock prices
Current Share PriceRM0.46
52 Week HighRM0.82
52 Week LowRM0.46
Beta0.81
1 Month Change-14.82%
3 Month Change-15.60%
1 Year Change-42.14%
3 Year Change-42.14%
5 Year Change-37.84%
Change since IPO119.05%

Recent News & Updates

Shareholder Returns

N2NMY SoftwareMY Market
7D-1.1%0.3%0.5%
1Y-42.1%-37.3%-7.1%

Return vs Industry: N2N underperformed the MY Software industry which returned -34.3% over the past year.

Return vs Market: N2N underperformed the MY Market which returned -7.1% over the past year.

Price Volatility

Is N2N's price volatile compared to industry and market?
N2N volatility
N2N Average Weekly Movement3.7%
Software Industry Average Movement7.1%
Market Average Movement5.5%
10% most volatile stocks in MY Market11.2%
10% least volatile stocks in MY Market2.8%

Stable Share Price: N2N is less volatile than 75% of MY stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: N2N's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2000200Andrew Tianghttps://www.n2nconnect.com

N2N Connect Berhad, an investment holding company, engages in the research and development of software packages in Malaysia, Hong Kong, and internationally. The company provides design, programming, consultancy, sales, marketing, and related services. It offers infrastructure for hosting, data processing, and related services; professional training for remisiers and related fields; hosting and managed network services; webpage and server design services; information technology systems and solutions; and wealth and asset management solutions, as well as manages investment properties.

N2N Connect Berhad Fundamentals Summary

How do N2N Connect Berhad's earnings and revenue compare to its market cap?
N2N fundamental statistics
Market CapRM259.56m
Earnings (TTM)RM18.16m
Revenue (TTM)RM112.08m

14.1x

P/E Ratio

2.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
N2N income statement (TTM)
RevenueRM112.08m
Cost of RevenueRM45.67m
Gross ProfitRM66.40m
Other ExpensesRM48.24m
EarningsRM18.16m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.033
Gross Margin59.25%
Net Profit Margin16.20%
Debt/Equity Ratio0%

How did N2N perform over the long term?

See historical performance and comparison

Dividends

4.3%

Current Dividend Yield

61%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is N2N undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for N2N?

Other financial metrics that can be useful for relative valuation.

N2N key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.1x
Enterprise Value/EBITDA5x
PEG Ratio1.1x

Price to Earnings Ratio vs Peers

How does N2N's PE Ratio compare to its peers?

N2N PE Ratio vs Peers
The above table shows the PE ratio for N2N vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average19.6x
EFORCE Excel Force MSC Berhad
22xn/aRM240.5m
IFCAMSC IFCA MSC Berhad
24xn/aRM178.9m
CENSOF Censof Holdings Berhad
9xn/aRM165.7m
MICROLN Microlink Solutions Berhad
23.6xn/aRM619.6m
N2N N2N Connect Berhad
14.1x12.7%RM259.6m

Price-To-Earnings vs Peers: N2N is good value based on its Price-To-Earnings Ratio (14.1x) compared to the peer average (19.6x).


Price to Earnings Ratio vs Industry

How does N2N's PE Ratio compare vs other companies in the Asian Software Industry?

Price-To-Earnings vs Industry: N2N is good value based on its Price-To-Earnings Ratio (14.1x) compared to the MY Software industry average (14.9x)


Price to Earnings Ratio vs Fair Ratio

What is N2N's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

N2N PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio14.1x
Fair PE Ratio25.6x

Price-To-Earnings vs Fair Ratio: N2N is good value based on its Price-To-Earnings Ratio (14.1x) compared to the estimated Fair Price-To-Earnings Ratio (25.6x).


Share Price vs Fair Value

What is the Fair Price of N2N when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: N2N (MYR0.46) is trading above our estimate of fair value (MYR0.29)

Significantly Below Fair Value: N2N is trading above our estimate of fair value.


Price to Earnings Growth Ratio

PEG Ratio: N2N is poor value based on its PEG Ratio (1.1x)


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Future Growth

How is N2N Connect Berhad forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


12.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: N2N's forecast earnings growth (12.7% per year) is above the savings rate (3.6%).

Earnings vs Market: N2N's earnings (12.7% per year) are forecast to grow faster than the MY market (10% per year).

High Growth Earnings: N2N's earnings are forecast to grow, but not significantly.

Revenue vs Market: N2N's revenue (1.5% per year) is forecast to grow slower than the MY market (5.2% per year).

High Growth Revenue: N2N's revenue (1.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: N2N's Return on Equity is forecast to be low in 3 years time (6.9%).


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Past Performance

How has N2N Connect Berhad performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


6.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: N2N has high quality earnings.

Growing Profit Margin: N2N's current net profit margins (16.2%) are lower than last year (26.7%).


Past Earnings Growth Analysis

Earnings Trend: N2N's earnings have grown by 6% per year over the past 5 years.

Accelerating Growth: N2N's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: N2N had negative earnings growth (-41.6%) over the past year, making it difficult to compare to the Software industry average (-16.3%).


Return on Equity

High ROE: N2N's Return on Equity (6.2%) is considered low.


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Financial Health

How is N2N Connect Berhad's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: N2N's short term assets (MYR167.2M) exceed its short term liabilities (MYR21.7M).

Long Term Liabilities: N2N's short term assets (MYR167.2M) exceed its long term liabilities (MYR3.5M).


Debt to Equity History and Analysis

Debt Level: N2N is debt free.

Reducing Debt: N2N has no debt compared to 5 years ago when its debt to equity ratio was 46%.

Debt Coverage: N2N has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: N2N has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is N2N Connect Berhad current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


4.35%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: N2N's dividend (4.35%) is higher than the bottom 25% of dividend payers in the MY market (2.08%).

High Dividend: N2N's dividend (4.35%) is low compared to the top 25% of dividend payers in the MY market (4.91%).


Stability and Growth of Payments

Stable Dividend: N2N has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: N2N has only been paying a dividend for 8 years, and since then payments have fallen.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (61.5%), N2N's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (45.3%), N2N's dividend payments are well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure


CEO

Andrew Tiang (59 yo)

no data

Tenure

RM343,397

Compensation

Mr. Boon Hwa Tiang, also known as Andrew, is the Founder of N2N Connect Berhad and serves as its Managing Director. Mr. Tiang's main responsibilities include management of N2N Connect Berhad’s overall busi...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD77.94K) is below average for companies of similar size in the MY market ($USD112.74K).

Compensation vs Earnings: Andrew's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: N2N's management team is considered experienced (3.9 years average tenure).


Board Members

Experienced Board: N2N's board of directors are considered experienced (4.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

N2N Connect Berhad's employee growth, exchange listings and data sources


Key Information

  • Name: N2N Connect Berhad
  • Ticker: N2N
  • Exchange: KLSE
  • Founded: 2000
  • Industry: Application Software
  • Sector: Software
  • Implied Market Cap: RM259.565m
  • Shares outstanding: 558.20m
  • Website: https://www.n2nconnect.com

Number of Employees


Location

  • N2N Connect Berhad
  • Wisma N2N
  • Level 9, Tower 2
  • Kuala Lumpur
  • Wilayah Persekutuan
  • 59200
  • Malaysia

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/07/01 00:00
End of Day Share Price2022/07/01 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.