N2N ... Aug09

It is leveraging on the rebound in the equity markets to promote new products and solutions.

Its recent new products include real-time risk management system, Tc Pro-Professional Trading System and the multi-market multi-asset order management system. These new products would enable brokers to compete internationally with live and direct access to global markets.

N2N’s fortune hinges largely on the performance of the stock markets, as it earnings are mostly derived from its eBrokerConnect services, whereby it enjoys recurring income through fixed monthly management fees while alternate income is derived from fees charged for every matched trade order executed via its online trading system.

N2N’s growth was remarkable during the stock market boom from 2004 to 2007, registering an average of 98% and 150% growth in revenue and net earnings respectively within those three years. Its net margin in the fiscal year ended Dec 31, 2007 (FY07) was at an impressive 65%. With the slump in trading activities since the beginning of the financial crisis last year, N2N’s earnings had dropped significantly..

N2N’s expansion drive into the overseas markets, particularly in the Middle East and other emerging markets like Vietnam and Indonesia. Its Singapore subsidiary, N2N Connect Pte Ltd, is spearheading its expansion into Hong Kong.

In FY2007, N2N had revenue contribution of RM11.2 million from its Middle East division, accounting for nearly 35% of total revenue. Furthermore, the high market trading volume on Bursa Malaysia then accounted for an increase in transaction fees.

Meanwhile, results of the efforts in overseas markets was bearing fruits, with the Middle East having started the implementation of its live trading programme, while Vietnam would follow soon.

N2N’s stockbroking clients commanded around 45% of the stock market trading value in 2007. At present, some of the largest stockbroking companies in Malaysia such as AmSecurities Sdn Bhd, Apex Securities Sdn Bhd, CIMB Securities Bhd, Kenanga Securities Sdn Bhd, SJ Securities Sdn Bhd, and Hwang-DBS Securities Sdn Bhd use the eBrokerConnect service.