Samsung, SK hynix Expected to Deliver Massive Shareholder Returns

Samsung Electronics and SK hynix are set to unveil major shareholder return plans this month, following their impressive earnings. Analysts suggest these substantial returns could help offset any decline in share prices and rebuild investor trust. According to industry reports, both companies intend to finalize and disclose their specific shareholder return strategies during the third quarter.

Last month, Samsung Electronics hinted at discussing its upcoming shareholder return policy, while SK hynix, after announcing a quarterly dividend of 375 won per common share, also indicated further return measures would be announced in the third quarter. Analysts believe that, given the significant free cash flow of both companies this year, their combined shareholder returns could surpass 150 trillion won.

Samsung Electronics' returns are projected to surpass market forecasts, with Hana Securities suggesting a range of 130 trillion won to 150 trillion won, including a potential 60 trillion won for treasury stock buybacks and approximately 70 trillion won for a year-end dividend. Similarly, KB Securities expects Samsung Electronics' new shareholder return plan to range from 100 trillion won to 200 trillion won annually, a considerable increase from its current 9.8 trillion won.

If realized, this could lead to a dividend yield exceeding 7%, potentially triggering a stock re-rating. SK hynix benefits from strong cash flow due to surging memory demand fueled by the artificial intelligence industry expansion. Mirae Asset Securities projects SK hynix's free cash flow will reach 180 trillion won by 2026, and even with a 100 trillion won cash reserve, returns of 40 trillion won are possible.

Hana Securities believes securing 40 trillion won to 60 trillion won in returns is feasible, considering second-half operating profit and capital expenditure. This shareholder return expansion aims to counteract concerns over potential peak memory semiconductor demand. Foreign media, such as Bloomberg News, view share buybacks and dividends as mechanisms supporting share price floors.

Overseas companies like Japan's Kioxia and the United States' Micron have already seen positive effects from announcing shareholder return plans. Unlike in the past, long-term supply agreements now help stabilize earnings and cash flow, shifting investor perception of memory companies from cyclical assets to cash flow-based investments.

Experts emphasize that the actual shareholder return amount becomes crucial when earnings momentum slows, as returning profits to shareholders with stable growth can lead to a structural value improvement rather than just a short-term rebound.