83 trillion won in earnings gain 'staying power'; SK hynix rebounds on 100 trillion won in shareholder returns

[Financial News] SK hynix extended its gains for a second straight session after reporting results that beat market expectations and unveiling a large-scale shareholder return plan. Analysts say the quarterly operating profit of 83 trillion won, together with the long-term demand outlook, helped ease concerns about how long the memory boom will last. The resumption of share buybacks is also seen as a factor that could support the stock.
According to the Korea Exchange, SK hynix traded at 1,487,000 won on the main board on the 28th, up 10.89% from the previous trading day. It reached 1,495,000 won intraday, nearing the 1.5 million won mark.
The strength of U.S. semiconductor stocks overnight also buoyed investor sentiment. On the 27th local time, the Nasdaq Composite Index rose 1.18% and the Philadelphia Semiconductor Index (SOX) gained 3.60%. Anthropic's move toward an initial public offering (IPO) raised expectations for investment in the artificial intelligence (AI) industry and related infrastructure.
In South Korea, SK hynix's earnings announcement added momentum to the rally. The company reported third-quarter revenue of 104.6155 trillion won and operating profit of 83.3338 trillion won. Those figures exceeded FnGuide's market consensus of 98.2257 trillion won in revenue and 76.964 trillion won in operating profit by 6.5% and 8.3%, respectively.
Profitability also improved. The operating margin rose 3.4 percentage points from the previous quarter to 79.7%. DRAM shipments increased about 10% quarter on quarter, while average selling prices rose in the high 20% range. NAND average selling prices also climbed in the mid-20% range, supporting growth in earnings.
What analysts focused on in the announcement was the durability of earnings. SK hynix's long-term agreement (LTA) customers increased from around 10 to 14. The volumes secured under contract account for at least 50% of production capacity in 2027–2028. The company said that, including volumes still under negotiation, it had effectively secured buyers for DRAM and high-bandwidth memory (HBM) through 2029. It expects demand to remain above supply through 2030.
Shareholder returns are another factor that could support the stock. SK hynix plans to return about 100 trillion won to shareholders this year. The third-quarter dividend is 20,000 won per share, including a special dividend. Of the roughly 20 trillion won in newly approved share buybacks, the shares bought with the 10 trillion won earmarked for shareholder returns will be canceled in full. The 10 trillion won allocated for employee compensation is excluded from the return total.
Net cash at the end of the third quarter stood at about 98.7 trillion won, up 29.3 trillion won from the previous quarter. The open-market share buyback starting on the 29th is expected to bolster domestic buying support, which has weakened during the recent lull in repurchases.
Lee Jae-won, an analyst at Yuanta Securities Korea Co., Ltd., said, “AI demand has translated into higher memory prices and earnings, as well as shareholder returns, providing grounds to counter the peak-earnings thesis.” He added, “We need to confirm the continuity of foreign investors’ net buying in the spot market and confidence in the profitability of AI investment.”
[email protected] Choi Doo-seon Reporter