[Click eStock] "Hancom, Core Business Growth Better Than Expected"

On the 14th, Kiwoom Securities analyzed that Hangul and Computer showed remarkable growth in its core business, which was better than expected, and that attention is now focused on AI-related sales that are about to begin.

Hangul and Computer recorded consolidated sales of 71.2 billion KRW and operating profit of 8.5 billion KRW in the third quarter of this year, marking increases of 24.9% and 159.9% respectively compared to the same period last year. Although the third quarter is usually an off-season, the growth in the core business led to strong performance. In particular, on a separate basis, operating profit reached 12.2 billion KRW, achieving the highest performance ever.

Kim Hak-jun, a researcher at Kiwoom Securities, stated in the report that day, "The main reason for the strong performance is that while on-premises sales remained steady, cloud sales grew nearly threefold compared to the same period last year." He added, "However, in the consolidated segment, Hangul Life Care recorded an operating profit of 300 million KRW, but due to the PPA effect, there was a decrease of about 1.1 billion KRW, and losses from other consolidated subsidiaries expanded, resulting in consolidated performance declining significantly compared to separate results."

He forecasted, "In the fourth quarter, although entering the peak season again, considering the sluggishness of consolidated subsidiaries, sales are expected to be 97 billion KRW (YoY +3.3%) and operating profit 10.5 billion KRW (YoY -1.8%)."

He also predicted that the growth of the core business will continue. He said, "First, the results of B2G-oriented PoCs (Proof of Concept) conducted in the first half will appear in the fourth quarter." He added, "If the PoC phase progresses to pilot projects, there is a high possibility of transitioning to official projects next year, so B2G-oriented AI business sales could expand."

Additionally, he stated, "Furthermore, the product lineup including Hancom Pedia and Hancom Assistant will expand, and related AI sales will grow significantly next year." He projected, "AI sales next year are expected to reflect about 15 to 20 billion KRW, and considering the growth trajectory of the cloud business, high growth is anticipated over the next three years."