Samsung Electronics and SK hynix ignite shareholder return competition... "A support for stock prices through year-end"

[Financial News] As Samsung Electronics and SK hynix rolled out shareholder return policies in quick succession this month, securities analysts said the two companies are likely to keep driving share prices higher through their competition over shareholder returns.
Injun Son, a researcher at Eugene Investment & Securities, said on the 24th that "Samsung Electronics disclosed a shareholder return plan totaling 90 trillion won to 110 trillion won for this year at its board meeting on the 21st." He added that "a special cash dividend of about 30 trillion won, based on the third quarter of this year, will be finalized at the October board meeting, while the allocation of the remaining 60 trillion won to 80 trillion won between dividends and treasury share cancellations will be decided at the January 2027 board meeting, after annual results are confirmed."
The remaining 60 trillion won to 80 trillion won at Samsung Electronics is expected to be announced as a combination of special dividends and treasury share cancellations. The explanation is that Samsung Life Insurance and Samsung Fire & Marine Insurance are close to the 10% ownership cap under the Financial Holding Company Act, which could reduce the share of cancellations relative to dividends. However, since Samsung Life Insurance and Samsung Fire & Marine Insurance carried out block sales of Samsung Electronics shares ahead of Samsung Electronics' treasury share cancellation in March, the possibility of expanding treasury share cancellations alongside additional share sales remains open.
Earlier, SK hynix resolved at its board meeting on the 19th to buy back 4 trillion won worth of treasury shares and cancel them in full. The company will purchase 24.07 million shares, equivalent to 3.3% of its market cap, on the open market within three months and cancel them immediately after the buyback is completed. It also raised its shareholder return ratio based on cumulative free cash flow (FCF) for 2025-2027 from the previous level of 50% or less to more than 50%.
Son said, "Unlike SK hynix, Samsung Electronics did not mention the possibility of raising its existing shareholder return policy, and it also did not announce a treasury share cancellation plan that could contribute more directly to stock price gains, which is disappointing." He added, "Still, the company is expected to meet market expectations through gradual additional shareholder return announcements in the future."
Son estimated that the two companies' treasury share purchases would account for about 8% of SK hynix's average daily trading value over the past 60 days and 3% to 4% for Samsung Electronics. If SK hynix maintains its current pace of share buybacks, the purchase will be completed by mid-October. For Samsung Electronics, he said that adding the 1.5 trillion won buyback to its existing treasury shares, worth about 22 trillion won, would bring the total to about 37 trillion won, effectively securing the funds for special bonuses based on this year's performance.
He said, "Both stocks effectively have large-scale buying support locked in through year-end, and in the short term, liquidity within the semiconductor industry is likely to shift back toward large-cap stocks, while materials, parts, and equipment companies may face relative weakness." He added, "Under the current shareholder return policy, SK hynix has the edge, but Samsung Electronics could also continue to see substantial capital inflows even if only part of the special dividend is reinvested."
[email protected] Park Ji-yeon Reporter