[Click eStock] "Hecto Innovation, Operating Profit Disappointing but Sales Grow for 14 Consecutive Quarters"

Yuanta Securities analyzed on the 9th that Hecto Innovation continues its growth, with Q3 sales increasing for 14 consecutive quarters. The investment opinion 'Buy' and the target price of 19,000 KRW were maintained.

Hecto Innovation recorded Q3 sales of 73.8 billion KRW and operating profit of 10.3 billion KRW. Compared to the same period last year, sales increased by 10.7%, but operating profit decreased by 14.3%. Jongseon Park, a researcher at Yuanta Securities, said, "The positive aspect of the Q3 performance is that sales have grown quarter-on-quarter for 14 consecutive quarters since Q2 2020, setting a record high sales," adding, "This is because not only Hecto Innovation headquarters but also its subsidiary Hecto Financial saw sales increase compared to the same period last year."

The decrease in operating profit was analyzed to be influenced by increased marketing and labor costs. He explained, "Operating expenses increased due to higher marketing and labor costs for nurturing new platforms," and added, "The positive point is that the operating profit margin slightly improved compared to the previous quarter."

Yuanta Securities forecasted that Hecto Innovation's Q4 sales and operating profit will reach 77.2 billion KRW and 10.4 billion KRW, respectively. Sales are expected to increase by 12.1% year-on-year, but operating profit is expected to decrease by 6.7%.