[Click eStock] "HectoFinancial Expected to Benefit from Live Commerce Market Growth"

DS Investment & Securities analyzed on the 5th that Hecto Financial is expected to benefit from the blooming live commerce market. No investment opinion or target price was provided.

Nam Min-wook, a researcher at DS Investment & Securities, stated, "We are currently developing a settlement system with the global shorts platform T," and explained, "As the domestic live commerce market blooms, when T enters the domestic market in the future, we will collect foreign exchange fees and payment transfer fees on commerce revenue."

He added, "The launch of Amazon's advance payment service is scheduled for the end of September," and explained, "The full reflection of sales is expected in the fourth quarter, and unlike Seller Loan (working capital loan), it does not affect credit ratings and allows for fast settlement processing." He further noted, "For reference, the daily fee rate of major companies providing advance payment services to e-commerce platforms such as Coupang is about 0.04% (annualized 14.6%)."

Additionally, benefits are expected from the enforcement of the amendment to the Electronic Financial Transactions Act. He said, "Attention should be paid to the 'Amendment to the Electronic Financial Transactions Act' scheduled to be enforced on September 15," and added, "Due to strengthened regulations, companies providing prepaid charging methods such as franchises and distributors are required to register as prepaid businesses."

He continued, "Merchants offering simple payment services must register as electronic payment gateway (PG) operators," emphasizing, "The important point is that it is possible to outsource prepaid business and electronic payment gateway business to fintech companies that already hold licenses, and Hecto Financial is understood to be the only company that can meet the demand for both prepaid and PG agency services."

DS Investment & Securities forecasted that Hecto Financial's sales and operating profit this year will increase by 5.4% and 31.7% year-on-year to 161.3 billion KRW and 16.3 billion KRW, respectively. He said, "Profitability improvement is expected due to mix improvement such as the expansion of relatively high-margin internal account payments and mobile phone payments."