Shareholder Return Projections: Samsung 200 Trillion Won, SK 100 Trillion Won; Outline Expected This Month

Possibility has been raised that Samsung Electronics and SK Hynix could return a combined 300 trillion won annually to shareholders. According to industry sources on the 16th, both companies are accelerating efforts to formulate shareholder return policies after shattering records for quarterly operating profit—89 trillion won for Samsung and 60 trillion won for SK Hynix—in the second quarter of this year. Samsung Electronics plans to fulfill its promise under its 2024–2026 three-year policy of returning 50% of its residual cash flow (cash remaining after deducting investments from operating cash flow), while SK Hynix has also committed to using the same percentage of its residual cash flow for shareholder returns over the 2025–2027 period.

Kim Dong-won, head of the Research Center at KB Securities, projected Samsung Electronics' annual shareholder return could reach between 100 trillion won and a maximum of 200 trillion won. He stated, "Even if the return scale is set at the minimum of 100 trillion won, the dividend yield based on the current stock price could exceed 7%." This represents an expansion of more than 10 to 20 times the existing annual return scale of 9.8 trillion won.

Earnings estimates support this scale. DS Investment Securities forecasts Samsung Electronics' operating profit this year at 39.19 trillion won and facility investment execution at 6.23 trillion won. Under this scenario, the firm calculates the free cash flow (FCF) would reach 26.32 trillion won. Even after deducting the total regular dividend of 2.94 trillion won from 50% of the cumulative FCF over the recent three years (16.13 trillion won), there remains potential for an additional 13.19 trillion won in returns. Mirae Asset Securities projected that if the three-year policy is implemented, Samsung Electronics' shareholder return yield this year could reach 6.8–9.5% for common shares and 9.1–12.7% for preferred shares.

Daishin Securities analyzed that SK Hynix has created an environment where it could invest up to 100 trillion won in shareholder returns this year. Researcher Ryu Hyeon-geun noted, "The company presented a net cash target of 100 trillion won at this year's general shareholders' meeting, a goal already surpassed." He anticipated that the company could proceed with share buybacks, cancellations, and special dividends using proceeds from the sale of its stake in Kioxia and the issuance of American Depositary Receipts (ADRs) as funding sources. Mirae Asset Securities estimated SK Hynix's FCF for this year at 18 trillion won. The firm calculates that even after reserving 10 trillion won as safe assets, available funds would be about 8 trillion won, and returning half of that amount would make possible a shareholder return of 4 trillion won.

SK Hynix reportedly responded to recent inquiries regarding expanding shareholder returns, stating, "Based on our unprecedented cash generation, we believe we can meaningfully expand shareholder returns while maintaining investments and sound financial health."

As stock prices for both companies showed a rebound over the past week, margin trading balances rose in tandem. According to Yonhap Infomax, as of the 14th, the margin balances for Samsung Electronics and SK Hynix stood at 4.8821 trillion won and 4.8121 trillion won, respectively, representing increases of 9.4% and 20.9% compared to the 31st of last month. The increase in margin balances, a key indicator of so-called 'debt-investing' (investing with borrowed money), indicates that borrowed capital is flowing into the stock market.