Shinhan Investment Corp. analyzed that Hecto Financial is competitive in its efforts to secure a leading position in the payment business. It raised its target price from the previous 21,000 won to 31,000 won, a 47.6% increase, while maintaining an investment opinion of 'buy.' On the previous trading day, Hecto Financial's closing price was 27,350 won.
Park Hyun-woo, a researcher at Shinhan Investment Corp., noted that since compliance and trust are important in the payment business, Hecto Financial, specialized in banking and settlement, is competitive as a conversion route between on-chain and off-chain.
Hecto Financial has focused on bank account-based payment services such as virtual accounts and firm banking in the past. Five years ago, it entered the electronic payment agency (PG) business, holding sources for all payment methods, including credit cards and mobile phones.
Recently, it is preparing to play the role of a distributor connecting consumers, merchants, and issuers by leveraging its specialization in settlement with bank networks to establish a reliable stablecoin infrastructure. Researcher Park explained, "There is expected demand for stablecoin use in cross-border payments and settlements, and Hecto Financial's strength as a cross-border settlement partner for numerous global payment service provider (PSP) corporations is becoming prominent."
In terms of overseas expansion, it is sequentially preparing to complete the technical foundation, secure overseas payment networks, and obtain local licenses. The establishment of a subsidiary in Japan is reported to be in the final stages.
Shinhan Investment Corp. predicted that in the second quarter of this year, Hecto Financial's sales revenue and operating profit would increase by 19% and 3%, respectively, marking 45.1 billion won and 3.7 billion won compared to the previous year. The proportion of PG in sales has expanded, and the profitability slightly deteriorated due to new business-related hiring and about 1.9 billion won in provisions for mobile payments.
Researcher Park noted, "On the 10th, it was decided to allocate 0.5 new shares per existing share in a free capital increase to improve liquidity," adding, "It is necessary to consider that the ex-rights date is scheduled."