[Asia Economy Reporter Jang Hyowon] Shinhan Investment Corp. analyzed on the 21st that Hecto Financial is expected to drive top-line growth through its existing payment business and profitability through its new data business.
Im Heeyeon, a researcher at Shinhan Investment Corp., stated in a report on the same day, “Hecto Financial is an electronic financial service provider that started with virtual accounts and expanded its services to cover all payment methods including simple cash payments, credit card PG, and mobile micropayments.” He explained, “Virtual accounts are a cash cow based on a 67% market share and high margin rates, and simple cash payments are growing steadily with a 97% market share. The PG business contributed to top-line growth due to the expansion of the electronic payment market.”
Shinhan Investment Corp. forecasted Hecto Financial’s sales and operating profit for this year to be 150.1 billion KRW and 17.8 billion KRW, respectively, representing increases of 16.2% and 29.6% compared to the previous year. The recovery of large merchant sales in simple cash payments, steady growth of PG due to electronic payment expansion, and growth of virtual accounts are expected to drive top-line growth.
Researcher Im said, “The pressure on profitability decline in PG sales will be offset by the increasing proportion of simple cash payment intermediation, growth of mobile micropayments, and mid- to long-term nurturing of the data new business.” He added, “In particular, the data new business has a high margin rate and will be a key business to improve profitability after the top-line growth strategy.”
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