Hecto Innovation. [Provided by Hecto Innovation]
Hecto Innovation. [Provided by Hecto Innovation]

Hecto Innovation and Hecto Financial, the two core affiliates of Hecto Group, delivered record quarterly earnings in the second quarter, driven by balanced growth across their core businesses and subsidiaries.

Both companies continued to expand their top lines amid growing expectations of benefits from the Financial Services Commission's push to regulate stablecoins and the broader expansion of the AI commerce market, which is driving demand for next-generation payment infrastructure.

Yuanta Securities Korea and Eugene Investment & Securities published research notes Monday assessing the two companies' second-quarter results positively and highlighting their medium- to long-term growth prospects.

Hecto Innovation posted consolidated second-quarter sales of 102.83 billion won ($72.4 million) and operating profit of 12.88 billion won, with sales rising 12.0 percent year on year. It was the second consecutive quarter the company surpassed 100 billion won in sales.

"Despite a slowdown in fintech earnings, the company sustained quarterly sales above 100 billion won, suggesting strong earnings continuity going forward," said Kwon Myeong-jun, an analyst at Yuanta Securities Korea. Subsidiary Hecto Healthcare also held steady above 20 billion won in quarterly sales, supported by the popularity of its De Simone probiotic line and the expanding lineup of its inner-beauty brand Only Ritual.

[Provided by Hecto Financial]
[Provided by Hecto Financial]

Hecto Financial likewise posted consolidated second-quarter sales of 50.1 billion won and operating profit of 4.6 billion won, up 12.6 percent and 20.2 percent year on year, respectively, marking three consecutive quarters of sales above 50 billion won.

"Easy cash payment sales rose 29.8 percent year on year, driving overall growth, while profitability improved significantly thanks to an influx of new cross-border customers and a higher share of high-margin proprietary membership services," said Park Jong-seon, an analyst at Eugene Investment & Securities. Park projected Hecto Financial's third-quarter sales at 52.6 billion won, up 15.0 percent year on year, with operating profit rising 21.7 percent to 5.5 billion won.

Analysts view the group's business model as a high-value proposition that goes beyond simple IT and payment processing. By generating synergies among subsidiaries on the back of solid core platform earnings, the group is repositioning itself as a next-generation fintech platform spanning virtual assets and AI commerce.

Stablecoin regulation and AI commerce expansion are identified as the two companies' key future growth drivers. Hecto Innovation plans to combine the wallet infrastructure of its blockchain wallet subsidiary Hecto Wallet One with Hecto Financial's payment and settlement infrastructure to offer a stablecoin payment solution. Hecto Financial became the first domestic company to join a global stablecoin payment network earlier this year and has since joined the x402 project — the emerging global standard for AI agent payments — accelerating its buildout of next-generation payment infrastructure.

Securities analysts said Hecto Group stocks are expected to see tangible benefits from the commercialization of stablecoins at home and abroad and the expansion of the AI commerce market, and forecast further upside for the shares.


silverpaper@heraldcorp.com