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South Korean media: Samsung Electronics plans to launch a shareholder return program of about 150 trillion won

On August 20, according to the Korea Economic Daily, Samsung Electronics plans to announce a shareholder return plan worth approximately 150 trillion won this month, exceeding the previously reported amount of 100 trillion won. It is expected to include measures such as stock buybacks and special dividends, potentially setting a new historical high for listed companies in South Korea. Industry insiders revealed that Samsung Electronics plans to hold a board meeting this month to review the relevant proposals. Earlier, the market had anticipated that the return scale could reach as high as 200 trillion won, but considering the company's basic principle of using 50% of free cash flow (FCF) for shareholder returns, the final scale is expected to be between 150 trillion and 160 trillion won.Samsung Electronics executives stated that with the recovery of the memory chip industry, the company's cash generation ability has significantly improved. Brokerages expect Samsung Electronics' total free cash flow for this year to be approximately 263 trillion won, and the cumulative free cash flow during the shareholder return policy period from 2024 to 2026 is expected to be around 319 trillion won. Based on a 50% return ratio, the total return funds are about 160 trillion won. After deducting the 39.1 trillion won already executed and planned for execution, the remaining funds are close to 120 trillion won.The market expects that Samsung Electronics may use the remaining funds to add a large-scale special dividend in addition to maintaining the regular dividend of 1,668 won per share each year, and to promote large-scale stock buybacks. Industry insiders indicate that following SK Hynix, Samsung Electronics' launch of a large-scale shareholder return plan may become an important factor in driving the valuation increase of the South Korean stock market.

SK Hynix plans to launch a shareholder return plan of approximately $71 billion, with a stock buyback scale of $28.4 billion

According to the Korea Economic Daily, SK Hynix is preparing a shareholder return plan that includes stock buybacks and cash dividends, with a total scale expected to be about 100 trillion won (approximately 71 billion USD).Among them, the stock buyback scale is expected to reach 40 trillion won (approximately 28.4 billion USD), accounting for more than 2% of the company's total issued shares. This scale is close to the proportion of new shares issued for the American Depositary Receipts (ADR) listing previously by SK Hynix.Compared to last year's shareholder return scale of about 14.3 trillion won (including about 2.1 trillion won in cash dividends and about 12.2 trillion won in stock cancellations), this plan's scale has increased by about 7 times.Behind SK Hynix's large-scale return plan is its leading position in the AI infrastructure core storage HBM (High Bandwidth Memory) market. The company expects revenue of about 345.6 trillion won this year, with operating profit of about 266.4 trillion won, representing year-on-year growth of approximately 256% and 464%, respectively.Previously, SK Hynix stated in its earnings call that HBM4 shipments will officially ramp up in the second half of the year, while advanced process DRAM shipments will also increase, with overall shipments expected to be higher than in the first half.Market institutions believe that as the demand for AI computing power continues to grow, SK Hynix's improved profitability may drive a recovery in the company's valuation. HSBC previously pointed out that the market's pricing of SK Hynix's profit cycle has been relatively pessimistic, and this shareholder return plan may become one of the important factors for valuation improvement.
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