Samsung, SK Hynix payouts test South Korea’s reform drive as investors seek more
Unlike other indices, the Kospi trades at just 4.3 times of expected 2027 earnings
Samsung Electronics and SK Hynix's eye-catching shareholder return plans have become a test of South Korea's corporate reform efforts, according to investors. The combined payouts of over 130 trillion won for this year alone have not fully satisfied the investors, who are seeking more to address South Korea's decades-old valuation gap.
Despite the AI boom, the two chipmakers' valuations remain low, with South Korea's benchmark Kospi trading at just 4.3 times expected 2027 earnings – the lowest in the region. Investors remain unconvinced that other companies will follow suit, as participation in the "Value-Up" program is voluntary. Some analysts argue that Samsung's announcement is disappointing, as it lacks detail and may rely heavily on special dividends that benefit the controlling family more than minority shareholders.
The program's success will depend on whether other companies follow suit, particularly as participation remains voluntary.
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