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Andrew Tiang (pic), managing director of N2N Connect Bhd: “We have a solid base and the right size to be agile. We consider ourselves as a young company willing to evolve with the emerging technologies such as blockchain and artificial intelligence."

PETALING JAYA: Armed with a war chest of some RM130mil in cash, trading platform provider N2N CONNECT BHD is on the lookout for merger and acquisition (M&A) opportunities, more regional penetration and new service offerings, said managing director Andrew Tiang.

Back in 2017, N2N acquired Hong Kong-based AFE Solutions Ltd for US$20.59mil and this helped it penetrate new markets in Asia. Now, two thirds of its revenue are derived outside Malaysia.

N2N has also since fully consolidated AFE’s earnings into its financial results.

“We have a solid base and the right size to be agile. We consider ourselves as a young company willing to evolve with the emerging technologies such as blockchain and artificial intelligence, ” said Tiang.

Capital markets may have been in turmoil since the Covid-19 outbreak but trading volumes in stocks have increased despite share prices falling sharply.

“In fact, the daily volume traded now is three times compared to the beginning of the year.

“The capital market, which is the sector we serve, will continue to benefit from the swift measures taken by central banks to preserve financial stability, ” said Tiang.

On whether Covid-19 affected N2N’s business, Tiang said: “No for existing operations but yes in the instances that we cannot be on site to deploy new projects due to the movement control order, not just locally but regionally.”

N2N is one of the largest providers of online real-time trading platforms for capital markets in Asia. Malaysia and Hong Kong are its two largest markets, in which it has a share of 70% and 40%, respectively.

N2N’s net profit grew 19.18% to RM15.68mil for its financial year ended Dec 31,2019. This was achieved on the back of a 2.8% drop in revenue to RM105.1mil. It declared a one sen dividend from four sen previously.

More than 90% of N2N’s revenue is on a recurring basis.

Based on its financials, N2N which is currently listed on the Ace Market, meets all the required criteria for a Main Market listing.

“In the previous AGM, this topic was brought up by some of our shareholders and we did express that we will plan and announce it officially in due course, ” said Tiang.

N2N closed 2.5 sen higher to 77.5 sen last Friday. At this price, it has a market capitalisation of RM463.3mil and yields 2.58% in dividends.

Tiang said N2N is in the midst of rolling out a new service platform which he expected to be a game changer for the industry. “We have been preparing for years for this prime time.

“While this global pandemic whacked the world crazy, it also presented investment opportunities beyond just domestic markets. Trading across global markets allow investors to pick investments in other countries, ” said Tiang.

He is talking about the Asia Trading Hub, a trading platform connecting key capital markets across the Asia-Pacific.

This hub allows rapid broker onboarding and is able to trade across more than 15 exchanges be it equities, derivatives, commodities, forex and many more.

“New client onboarding will be as quick as 15 minutes for account opening. This will allow more than a hundred of our panel brokers across the region to interbroke with each other, widening their reach beyond domestic border and allow retail investors to hedge their risk globally, ” said Tiang.

Japanese financial services and trading player SBI Holdings Inc and it’s subsidiary SBI Japannext Co Ltd emerged as substantial shareholders of the company in 2018, and one of its interest was to collaborate on the Asia Trading Hub.

SBI Japannext was looking to collaborate in the development of alternative trading systems, particularly in cross-border trading.

While SBI first appeared with a 20.36% stake, SBI Japannext subsequently bought an 11.65% stake in the company. With their collective stake of 32.01%, they replaced Tiang as N2N’s largest shareholder.

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