Did the ‘wow’ factor make the difference? Samsung and SK hynix shares diverge after earnings reports

[Financial News] Samsung Electronics and SK hynix both posted record earnings, but the market reaction was mixed. SK hynix surged after reporting earnings that topped market expectations and unveiling a shareholder-return plan worth about 100 trillion won. Samsung Electronics, by contrast, fell as it had yet to announce concrete steps for additional shareholder returns and shares also faced profit-taking after the previous day's sharp rise. Brokerages, however, remain confident in the artificial intelligence (AI) memory cycle, issuing price targets more than twice the companies’ share prices.
According to the Korea Exchange, Samsung Electronics rose as high as 249,000 won intraday on the morning of the 29th, before its final earnings and dividend announcement, then reversed course and closed at 232,000 won, down 10,000 won (4.13%) from the previous day. That contrasted with SK hynix, which closed the previous day at 1,487,000 won, up 10.89%. SK hynix also closed higher that day, gaining 2.62% to 1,526,000 won.
The companies’ differing share-price reactions are widely attributed to their concrete plans for implementing shareholder returns. SK hynix said it would pursue about 100 trillion won in shareholder returns this year, including at least 30 trillion won in cash dividends and at least 60 trillion won in share buybacks and cancellations. In the third and fourth quarters, it plans to pay 20,000 won per share, comprising dividends based on earnings and a special dividend funded by proceeds from its KIOXIA investment.
Samsung Electronics also confirmed a dividend payout worth 30 trillion won that day and said it planned to use a substantial portion of its remaining shareholder-return funds to buy back and cancel its own shares. However, it plans to announce the specific implementation details and its next shareholder-return policy in January next year. The move appears to have fallen short of market expectations for additional steps beyond the already announced dividend.
Although the stocks moved in opposite directions in the short term, the outlook for the sustainability of semiconductor earnings in 2027–2028—a focus for the market—remains strong. According to financial information provider FnGuide, the consensus for Samsung Electronics’ 2027 operating profit stood at 560.7707 trillion won, up 3.55% from three months earlier; the 2028 estimate was raised 15.00% to 613.6833 trillion won. Its estimate for this year fell 2.43% over the same period to 371.6977 trillion won, but expectations for medium- and long-term earnings rose instead. SK hynix’s 2027 estimate was also raised 1.68% over the same period to 405.2637 trillion won, while its 2028 estimate rose 9.14% to 435.7014 trillion won.
Price targets issued by brokerages are more than twice the companies’ share prices. FnGuide’s average analyst price targets over the past three months were 492,500 won for Samsung Electronics and 3,220,000 won for SK hynix. Based on that day’s closing prices, the stocks had respective upside potential of 112.3% and 111.0%.
SK hynix’s medium- to long-term demand outlook also helps ease concerns about the durability of the memory market. Production volumes through 2029 are effectively fully booked, and the proportion of long-term supply contracts also exceeds 50%, increasing visibility into future earnings. Securing demand several years out is seen as having eased market concerns about a slowdown in AI investment. Of the 16 brokerages that published reports on SK hynix from the day after its earnings announcement through that day, three raised their price targets. BNK Investment & Securities, which had set the lowest target in South Korea, also raised its target by 11.5%, from 1,480,000 won to 1,650,000 won.
“The absence of an immediate, concrete share-buyback plan that could improve deteriorating supply-demand conditions appears to have prompted selling by disappointed investors,” said Lee Young-gon, head of the Research Center at Toss Securities. “Fundamentally, what matters is whether monetization of the AI industry can ultimately create a virtuous cycle,” he explained.
[email protected] Joo Won-gyu Reporter