[Click eStock] "HectoInno, Growth in Core Business and Subsidiaries"

Yuanta Securities analyzed on the 9th that Hecto Innovation's core business and subsidiaries are expected to grow. No investment opinion or target price was presented.

Hecto Innovation was established in 2009. It was listed on KOSDAQ in 2015. In 2022, the company changed its name from Min&Ji to Hecto Innovation. Starting with mobile phone number protection services, it provides various secondary authentication and security/protection services as its main business. Major consolidated subsidiaries include Hecto Financial, acquired in 2016 and listed on KOSDAQ in 2018, and Hecto Healthcare, acquired in 2020.

Kwon Myung-jun, a researcher at Yuanta Securities, said, "The growth trend of the core industry, IT services (mobile phone value-added services), continues," adding, "Since its listing in 2015, sales and operating profit have grown at an average annual rate of 16.9% and 11.0%, respectively." He also noted, "Recently, a shareholder return plan was announced, which plans to pay a minimum dividend of 22% or more based on the annual separate financial statement net profit and to use 1% of the total issued shares annually for cancellation by utilizing treasury shares already held."

The AI-based smishing response service is also an anticipated area. He explained, "Recently, smishing crimes that induce URL access have been increasing. We are preparing security solutions related to this," adding, "When a URL is copied or a screen capture is input into the app, AI analysis determines whether the text and photo are related to smishing."

He explained, "In 2013, a survey on mobile app security was conducted by the University of Colorado in the United States targeting 1,700 smartphone users, and more than half of the respondents said they would pay for app security," adding, "They answered that they were willing to pay up to $4.07 to prevent hacking that penetrates smartphones and collects various data."

He added, "Considering that this was 10 years ago, it is expected that the price of the company's app, which prevents smartphone hacking, will likely be set at over $10."

Along with this, growth of subsidiaries is also expected. He emphasized, "The subsidiary Hecto Financial announced a collaboration with PingPong Payments, an Amazon payment partner, last March," adding, "They plan to provide an advance payment service within 24 hours for domestic sellers using Amazon within this year, and benefits are expected from the growth of the reverse direct purchase market."