Heungkuk Securities gave a positive assessment of Hecto Financial's steady growth in its existing payments business and the growth potential of new businesses, including stablecoins and AI agent payments. The company continues to expand its business, led by high-margin operations, and an analysis suggests that expanding its global payments infrastructure will also serve as a medium- to long-term growth driver.

On November 13, Heungkuk Securities initiated coverage of Hecto Financial with a "Buy" rating and a target price of KRW 23,000. In a report, researcher Yoo Junseok of Heungkuk Securities said, "The company has high growth potential, as new growth drivers such as cross-border settlement, stablecoins, and AI agent payments are being added to its diversified existing payments business, which provides a stable earnings base."

Third-quarter results also confirmed growth in the existing business. Hecto Financial recorded revenue of KRW 52.6 billion in the third quarter, up 14.9% year over year, while operating profit rose 6.2% to KRW 4.8 billion.

By business segment, revenue from its payment gateway (PG) services reached KRW 25 billion, buoyed by an expanded merchant base and higher transaction volumes. This was up 14.1% year over year. Revenue from simple cash payments increased 12.5% to KRW 12 billion, reflecting the growing share of "My Account Payment," a high-margin service based on the company's own membership base.

Researcher Yoo said, "Revenue from simple cash payments has remained in the KRW 10 billion range since the third quarter of last year. High-margin proprietary services are driving growth, and their contribution to earnings is expected to continue expanding."

Other revenue, including cross-border settlement, reached KRW 8 billion, up 42.0% year over year, driven by growth in existing businesses and the expansion of new services such as mobile coupons. An analysis suggests there is also room to improve profitability as the revenue mix shifts toward high-margin businesses.

The global payments and settlement business was also cited as a growth driver. In February this year, Hecto Financial joined the Circle Payments Network (CPN) as an official partner of global stablecoin issuer Circle, and recently became involved in the OpenUSD (OUSD) ecosystem, a dollar-based stablecoin infrastructure.

Researcher Yoo said, "Securing access to both major networks has broadened the company's options for meeting demand for stablecoin-based cross-border payments and settlements." The company is also expanding its partnerships with overseas platforms in its existing cross-border settlement business and broadening its business scope through small-value overseas remittances using its foreign exchange license.

The company is also working to secure technology targeting the AI agent payments market. Hecto Financial has completed a proof of concept (PoC) for related technology, joined the ecosystem for the AI payments protocol x402, and is collaborating with t54 Labs, which has technology for verifying agent identities and managing transaction risks.

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However, the target price does not reflect the value of the new businesses, as the timing of related legislation and monetization has yet to be specified. Researcher Yoo said, "The timing of stablecoin legislation in Korea remains uncertain, but the company is already putting into practice what can be done with its current infrastructure, which should enable it to respond quickly when the market takes off. If institutionalization progresses and revenue from new businesses becomes more tangible, there could also be an upward revaluation."

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