“Are they saying buy or don’t buy?” ... Why analysts are divided despite Samsung-Nix’s record 210 trillion won in shareholder returns

[Financial News] Samsung Electronics and SK hynix, the country’s two semiconductor giants, are set to launch a record-breaking shareholder-return program worth a total of 210 trillion won this year, buoyed by an unprecedented boom in artificial intelligence (AI) semiconductors. That is roughly three times the total shareholder returns made by all listed companies in Korea last year.
However, despite the two companies’ announcements of massive dividends and share cancellations, analysts are sharply divided, with concerns that the industry has peaked pitted against expectations of a prolonged boom. The split is reflected in target prices that differ by as much as 2.35 million won.

According to semiconductor and securities industry sources on the 29th, Samsung Electronics and SK hynix are expected to return a combined 190 trillion to 210 trillion won to shareholders this year. Samsung Electronics is expected to account for around 90 trillion to 110 trillion won, and SK hynix around 100 trillion won.
That is 2.6 to 2.9 times the 72.3 trillion won total of cash dividends (50.9 trillion won) and share cancellations (21.4 trillion won) made by all Korean-listed companies last year, according to the Korea Exchange. The figure is also a record compared with the two companies’ past returns: five times Samsung Electronics’ previous high of 20.3 trillion won in 2020, and seven times SK hynix’s 14.3 trillion won last year.
Samsung Electronics’ board approved a cash dividend plan today, offering 4,601 won per share as its third-quarter dividend, for a total of 30 trillion won. Including the 4.9 trillion won already paid out in the first half, the company has finalized 35 trillion won in returns. It plans to detail the return of the remaining 55 trillion to 75 trillion won in funds alongside its next shareholder-return policy in January next year. The remaining funds will include substantial share buybacks and cancellations.
SK hynix, which disclosed preliminary third-quarter results the previous day, proposed a total shareholder-return package of 100 trillion won for this year. Following the completion of a 40 trillion won share buyback announced in August, the company approved a third-quarter cash dividend of 20,000 won per share (10,000 won in performance-based dividends plus a 10,000-won special dividend from gains on the sale of Kioxia shares, totaling 14 trillion won) and an additional 20 trillion won in share buybacks (10 trillion won for cancellation and 10 trillion won for employee compensation). Its plan is to distribute at least 30 trillion won in cash dividends annually and spend at least 60 trillion won on share purchases and cancellations.
The companies’ unprecedented shareholder returns are made possible by a surge in earnings fueled by increased investment in AI infrastructure. Their combined operating profit is forecast to reach 636.9 trillion won this year—369.6 trillion won at Samsung Electronics and 267.3 trillion won at SK hynix. SK hynix posted third-quarter revenue of 105 trillion won, up 328% year over year, and operating profit of 83 trillion won, up 632%, setting a new quarterly record.

Despite record earnings and an unprecedented shareholder-return plan, analysts’ assessments vary widely. Target prices for SK hynix in particular range from a low of 1.65 million won to a high of 4 million won, a gap of a whopping 2.35 million won.
SK Securities and Kyobo Securities maintained their 4 million won target price, signaling strong confidence. SK Securities said, “The deepening memory supply shortage and the full impact of High Bandwidth Memory 4 (HBM4) will usher in an era of 105 trillion won in operating profit in the fourth quarter,” adding, “With memory demand expected to remain stronger than supply through 2030 and the company’s commitment to shareholder returns in the 100-trillion-won range confirmed, the current share price is significantly undervalued.”
BNK Investment & Securities, by contrast, raised its target price only slightly, from 1.48 million won to 1.65 million won, and maintained its ‘Hold’ rating. The firm took a cautious stance, saying, “A rebound is possible amid rising HBM prices and short-term oversold conditions, but memory-demand momentum peaked in the second quarter and has begun to slow.” It added, “Given the credit risks facing AI companies and the high-interest-rate environment, the low price-to-earnings (P/E) trend is likely to persist.”
Some firms also lowered their target prices. KB Securities cut its target from 4.2 million won to 3.5 million won despite acknowledging strong earnings. IBK Investment & Securities likewise lowered its target from 4 million won to 3.2 million won, citing an adjustment to the gap between its target and the current share price rather than concerns about industry conditions.

Experts broadly agree that while these massive shareholder returns could put a floor under the share price in the short term and help resolve undervaluation, two conditions are essential for a structural improvement in valuation.
The first is stronger technological competitiveness, led by high-bandwidth memory (HBM), and an expansion of long-term agreements (LTAs). Analysts say stable free cash flow (FCF) can be sustained only if the companies maintain a solid technological lead amid the fierce pursuit by China’s ChangXin Memory Technologies (CXMT) and others.
The second is institutional predictability that goes beyond one-off ‘surprise’ returns. A market source said, “As with major U.S. tech companies, a standing capital-allocation principle must take root, with companies consistently canceling their own shares and paying dividends in line with earnings and cash flow.” The source added, “Only when this is backed by improved corporate governance and predictable systems will long-term foreign investment flow in, allowing the Korea discount to be fundamentally addressed.”
[email protected] Moon Young-jin Reporter