[Click eStock] "Hyosung ITX, Growing Core Business and Rising Expectations for New Ventures"

[Asia Economy Reporter Hyunseok Yoo] Hanyang Securities analyzed on the 15th that Hyosung ITX is experiencing strong core business performance along with growing expectations for new businesses. No investment opinion or target price was provided.

Hyosung ITX is an SI affiliate of the Hyosung Group, primarily engaged in contact centers, IT services, and display solutions. Over the past 10 years, it has recorded an average annual growth rate of +11.1%, maintaining stable external growth.

Yongho Kim, a researcher at Hanyang Securities, said, "The recent growth driver is the strong performance of contact centers, which provide comprehensive services from construction to operation." He added, "As non-face-to-face services have expanded due to COVID-19, the importance of contact centers, which are the closest non-face-to-face touchpoints between companies and customers, has also increased." He further stated, "With the expansion of demand for non-face-to-face services, diversification of new online-based services and strengthening of existing services have emerged, leading to an estimated increase in the overall contact center market size."

He emphasized, "The increased importance of contact centers triggered by COVID-19 is considered a trend. As the advancement of contact centers is accelerating by integrating AI, cloud, and other technologies, we judge the market environment to be favorable for the company."

Additionally, Kim explained that the expansion of new businesses is also an expected factor. He said, "The Hyosung Group is expanding IT-related businesses amid the digital transformation trend. Hyosung ITX continues to strengthen new IT sectors such as smart factories, sustaining high growth."

He added, "They are preparing a B2C platform business scheduled for launch early next year. The subsidiary, Galaxia Moneytree, is also actively promoting new NFT-related businesses, building a future growth model at the group level."

He forecasted that this year's sales and operating profit will reach 478.9 billion KRW and 19.8 billion KRW, respectively. While sales are expected to decrease by 1.1% year-on-year, operating profit is projected to increase by 17.8%. He explained, "The negative sales growth is due to a high base effect from sales related to the ‘Public Data Youth Internship Project’ ordered from the Korea Information Society Agency in August last year. This project can be seen as a one-time order as part of the Digital New Deal project. Excluding approximately 56 billion KRW in sales from this project, this year's expected sales would increase by 11.9% compared to the same period last year."