Will SK hynix Move to Reassure Shareholders? Attention Turns to Return Measures

[Financial News] SK hynix, which had recently been on a steep downward trend, hit the upper price limit on strong semiconductor sentiment from the United States. Market watchers say that as concerns surrounding semiconductors ease, any added shareholder return measures could give the stock even more momentum.
On the 31st, SK hynix shares closed at 1,718,000 won, up 396,000 won, or 29.95%, from the previous trading day, reaching the daily upper limit.
The improved investor mood appears to reflect the continued strength of semiconductor stocks on Wall Street overnight. After Microsoft (MS) delivered an earnings surprise, concerns over excessive investment in Artificial Intelligence (AI) have eased.
Micron Technologies surged 18.36%, while SanDisk Corporation rose 25.99%, Advanced Micro Devices, Inc. (AMD) gained 13.00%, and Intel climbed 11.30%. SK hynix's American Depositary Receipt (ADR) also jumped 17.52%.
For SK hynix, news that Chey Tae-won, chairman of SK Group, bought shares added another positive factor. Chey purchased 3,620 common shares of SK hynix through open-market buying the previous day. Based on the previous day's closing price, the purchase was worth about 4.8 billion won.
This was the first time Chey had bought SK hynix shares. When a purchase exceeds 5 billion won, advance disclosure is required, but his quick move without such procedures has been seen as a sign of his commitment to responsible management.
Expectations are also rising in and outside the market for shareholder returns from SK hynix. Investor sentiment had been shaken after the company failed to give a clear stance on shareholder returns during its recent earnings conference call. Analysts expect SK hynix to announce a shareholder return policy after next month, citing constraints related to the ADR offering.
Son In-jun, a researcher at Eugene Investment & Securities, said, "The reason the stock underperformed relatively after earnings appears to be that no specific details were provided on shareholder returns and the long-term supply agreement (LTA)." He added, "It seems the company could not make specific comments on shareholder returns after the ADR listing."
He continued, "There is no change in the view that the company is preparing additional shareholder returns, and implementation in the fourth quarter appears highly likely." He added, "Depending on market conditions, an earlier rollout is also possible."
Seo Seung-yeon, a researcher at DB Securities Co., Ltd., said, "Shares had been falling amid doubts about whether big tech companies can recoup their AI investments and downward revisions to earnings expectations for memory chip makers." She added, "Next year, strong AI demand and tight DRAM supply are likely to keep selling prices on an upward trend, and if an aggressive shareholder return policy is announced, the stock could post a sharp rebound."

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