In QE313/2019, N2N's net profit rose 99% q-o-q but dropped 16% y-o-y to RM5.6 million while its revenue dropped 2% q-o-q but rose 6% y-o-y to RM27 million. The Group’s revenue dropped marginally q-o-q due to a one-time implementation fees recorded in the previous quarter. Compared to the immediate preceding quarter, the Group’s core profits improved by 53.72% to RM4.45 million (Q4 2018: RM2.89 million) mainly due to lower provisions for trade receivables and other non-recurring administration costs.
Table: N2N's last 8 quarters' P&L
Graph: N2N's last 22 quarters' P&L
Latest Financial Position
As at 31/3/20198, N2N's financial position is very healthy, with current ratio of 6.4x and gearing ratio of 0.19x.
N2N (closed at RM0.745 last Friday) is now trading at a PER of 34x (based on annualized core EPS 2.18 sen). At this PER, N2N is deemed fully valued.
N2N is in a long-term uptrend line (SS) with support of RM0.73 (previously stated at RM0.80).
Chart: N2N's weekly chart as at May 17, 2019 (Source: Malaysiastock.biz)
Based on satisfactory, albeit weaker, financial performance, healthy financial position and positive technical outlook, N2N could be a good stock for long-term investment. It may benefit from a pick-up in equities trading in the region this year.
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