"Samsung 200 Trillion + Hynix 100 Trillion"... The 300 Trillion Won Shareholder Return Race Set to Reshape the Domestic Market

Expectations Surge for Shareholder Returns Amid Record Earnings

Samsung Electronics Poised for Up to 200 Trillion Won in Annual Shareholder Returns

SK hynix Projected to Return 57 Trillion Won This Year, 120 Trillion Won Next Year

With the semiconductor boom leading to record-breaking performance for both Samsung Electronics and SK hynix, the market is closely watching the shareholder return measures these companies will unveil. The securities industry forecasts that the combined size of shareholder returns by Samsung Electronics and SK hynix could approach as much as 300 trillion won. In particular, with both companies' share prices underperforming since last month, there is strong anticipation that aggressive shareholder return measures could help trigger a rebound.

According to the financial investment industry on August 12, Samsung Electronics is expected to announce, as early as this month, concrete plans for shareholder returns, including a special dividend, as well as its next three-year policy. During the second-quarter earnings conference call at the end of last month, Samsung Electronics stated, "Currently, the Board of Directors and management are discussing the specifics of this year’s shareholder return policy, including a special dividend, and are also considering the next round of shareholder returns." SK hynix also recently clarified, "We are actively reviewing additional shareholder return measures to enhance shareholder value, and specific details will be finalized and officially announced in the third quarter."

Samsung Electronics Expected to Expand Annual Shareholder Returns by More Than Tenfold

The market’s focus is on how large the shareholder return will be for these two companies, both of which have achieved record-high performance. From 2024 to 2026, Samsung Electronics pledged to return 50% of free cash flow (FCF) over three years to shareholders and has been paying out 980 billion won per year in dividends. In the securities industry, there are projections that Samsung Electronics’ annual shareholder return could expand to as much as 200 trillion won.

KB Securities estimates Samsung Electronics’ annual shareholder return to be between at least 100 trillion won and up to 200 trillion won, more than ten times larger than the current annual level of 9.8 trillion won. Kim Dongwon, head of research at KB Securities, commented, “The upcoming new shareholder return policy is expected to result in an annual return scale more than ten times larger than before. Over the next three years, the total amount could reach at least 600 to 700 trillion won, and the dividend yield based on cash dividends alone could be as high as 7 to 15 percent.”

Mirae Asset Securities analyzed that, if 50% of FCF from 2024 to 2026 is returned to shareholders, this year’s yield from shareholder return could reach 6.8 to 9.5 percent for common shares and 9.1 to 12.7 percent for preferred shares. Kim Younggeon, a research analyst at Mirae Asset Securities, stated, “This year is just the beginning, and the real milestone year for full-scale shareholder returns will be 2027. For the last nine years, Samsung Electronics has fixed annual dividends at about 1 trillion won every three years, or about 10 trillion won each year (roughly 370 won per quarter), assuming an FCF of 60 trillion won every three years and a payout ratio of 50%. However, from 2027, the three-year accumulated FCF is conservatively estimated to be over 600 trillion won. If the return ratio remains the same, the amount available for returns, in theory, is ten times larger.”

DS Investment & Securities forecast that a total of 132 trillion won in additional shareholder returns could be possible this year. Lee Surim, a research analyst at DS Investment & Securities, explained, “Our estimate for Samsung Electronics’ operating profit in 2026 is 391.9 trillion won, and operating cash flow (OCF) is projected at 325.5 trillion won. Assuming capital expenditures (CAPEX) of 62.3 trillion won in 2026, free cash flow (FCF), calculated as OCF minus CAPEX, is estimated at 263.2 trillion won in 2026.” Lee continued, “Accordingly, half of the three-year cumulative FCF amounts to 161.3 trillion won, and after subtracting 29.4 trillion won for regular total dividends, 131.8 trillion won would be available for additional shareholder return.”

SK hynix Expected to Deploy More than 100 Trillion Won for Shareholder Returns

While SK hynix’s existing three-year shareholder return plan runs until 2027, the unprecedented memory boom has prompted calls for even larger additional returns. During its earnings announcement on July 29, SK hynix did not disclose specific measures due to restrictions related to the U.S. American Depositary Receipt (ADR) public offering process, leading to assessments that its stock price lagged behind Samsung Electronics. In response, SK hynix announced on August 7 a quarterly dividend of 375 won per common share, and stated that further shareholder return plans would be announced in the third quarter. From the earnings announcement to the disclosure of a return plan, SK hynix’s share price dropped 8.26 percent, while Samsung Electronics gained 5.00 percent. Before the plan was released, SK hynix’s regular market price fell 4.88 percent, but after the disclosure, post-market losses narrowed to about 1 percent.

The securities industry has presented estimates based on SK hynix’s plan to utilize 50 percent of its free cash flow from 2025 to 2027 for shareholder returns. Mirae Asset Securities projects SK hynix’s FCF at 180 trillion won this year, with net cash accumulating to 173 trillion won. Kim Younggeon, an analyst at Mirae Asset Securities, commented, “Even if 100 trillion won is reserved as a safe asset, 70 to 80 trillion won in available funds remain. It is therefore quite feasible to return half of that to shareholders.” Mirae Asset Securities currently estimates the dividend yield to be up to 3.9 percent, based on current share prices.

Samsung Securities anticipates shareholder returns of 57 trillion won this year and 120 trillion won next year, based on its estimate of 50 percent of SK hynix’s FCF. The proceeds from the sale of Kioxia, totaling 63.3 trillion won, are also considered a potential target for shareholder returns. Dividend yield is projected at 3.6 percent for this year and 7.9 percent for next year based on current market prices.

Daishin Securities believes that up to 100 trillion won could be injected into shareholder returns. Ryu Hyungkeun, an analyst at Daishin Securities, noted, “At the beginning-of-year general shareholders meeting, SK hynix set this year’s financial goal as net cash of 100 trillion won, a target already surpassed. The historic boom, the results of strategic investments (large inflow from selling Kioxia shares), and capital raising (ADR issuance) are the main factors, creating an environment where up to 100 trillion won can be allocated to share buybacks, cancellation, and special dividends.”

Some analysts add that if both companies’ shareholder return policies meet or exceed market expectations, there may be a rebound for major KOSPI-listed large-cap stocks. Lee Jaewon, an analyst at Yuanta Securities, said, “If the shareholder return policies for Samsung Electronics and SK hynix are stronger than expected, and if market interest rates stabilize, concerns over Chinese memory supply and peak pricing will have already been significantly reflected in share prices, creating enough possibility for a turnaround in large-cap stocks.”

This content was produced with the assistance of AI translation services.