사진 확대
Samsung Electronics, which rose 3.87% in the regular market on the 21st due to expectations for shareholder return policies, closed 0.37% lower in the after-market after the shareholder return of 90 trillion won to 110 trillion won was announced shortly after the market closed. In the aftermath, KOSPI night futures traded in New York on the same day also fell 2.1% from the regular market close. This happened despite the announcement of the largest shareholder return ever, more than double that of SK Hynix. One of the factors that determined such stock price movements is that the timing of treasury stock purchases has not been specified.
SK Hynix’s stock price soared 15.3% in two trading days, buying more than 1 trillion won of treasury stocks every day after the announcement of the retirement of treasury stocks on the 19th. This is why the market has come to prefer treasury stock purchase and incineration cards. Share buybacks can be implemented from the date of the transaction after the announcement, but some say that the timing of receiving dividends in the third quarter is still far away as it is expected to be around November.
◆ Incineration of treasury stocks blocked by regulation of the Financial Industry Act
If Samsung Electronics burns its own shares, its financial affiliates Samsung Life Insurance and Samsung Fire & Marine Insurance will have a higher stake in Samsung Electronics. In this case, there is a problem that the financial company’s holding of shares in general companies exceeds the 10% holding limit under the Act on Structural Improvement of the Financial Industry (Kumsan Act). This is why, unlike SK Hynix, it cannot actively participate in the retirement of treasury stocks.
If Samsung Electronics begins to buy 40 trillion won in treasury stocks, it will have to sell its stake worth 4 trillion won from Samsung Life Insurance and Fire Insurance to protect the Financial Industry Act. Earlier in February 2025, when Samsung Electronics incinerated its own shares, its financial affiliates Samsung Life Insurance and Samsung Fire & Marine Insurance sold 4.25 million and 740,000 shares, respectively, to avoid the issue of the Financial Industry Act, resulting in 275 billion won in block deal volume to the market. In March this year, Samsung Life Insurance and Samsung Fire & Marine Insurance launched a block deal worth a total of 1.5 trillion won as Samsung Electronics began burning its own shares.
Some pointed out that these regulations of the Financial Industry Act run counter to the purpose of value-up and do not fit the changed financial environment, but the move to revise the legislation is still not taking shape.
Yoon Han-hong, a lawmaker of the People’s Power, proposed an amendment to the Financial Industry Act that would give post-approval or a grace period for sale if major shareholders hold shares above the legal share limit when financial companies incinerate their shares to enhance shareholder value in 2025. The intention was to give a grace period of less than two years without selling the stake immediately even if the stake exceeds the legal limit due to the retirement of treasury stocks, but it still has not exceeded the threshold of the National Assembly.
Some say that Samsung Electronics needed to incinerate its preferred stocks in order to narrow the gap between preferred stocks and main stocks, which reached 27%. Lee Nam-woo, chairman of the Korea Corporate Governance Forum, said, “The gap between preferred stocks does not resolve because the dividend yield is higher than that of main stocks. Considering that preferred stocks are underprivileged assets and have a very low share price-to-earnings ratio (PER), it is right to retire their shares in consideration of preferred stocks.”
On top of that, Samsung Electronics also raised concerns that the size of FCF may be further reduced by deducting the advance payment of long-term supply contracts and the compensation of employees’ performance-based stocks when calculating the free cash flow (FCF), which is a source of shareholder return. Unlike SK Hynix’s lower limit of shareholder return to “more than 50% of FCF,” Samsung Electronics’ upper limit of “50% of FCF” is another factor that caused disappointment in the market.
◆ It’s likely to continue until 2029 when it’s all-time reduction
Nevertheless, the positive assessment of Samsung Electronics’ announcement of a shareholder return plan comparable to the global semiconductor company with an all-time scale of 90 trillion won to 110 trillion won is dominant. Kim Hak-kyun, head of the research center at Shinyoung Securities, said, “Samsung Electronics’ operating profit for 36 years was 621 trillion won, but its profit-generating power has changed to make 500 trillion won next year alone. We expect it to show a stable increase rather than an explosive increase in stock prices.”
Analysts say that the planned dividend of 30 trillion won in the third quarter alone will also increase support for downward stock prices. According to Citi Global Market Securities, Samsung Electronics is expected to have a total dividend of 120 trillion won after next year, and if the market price dividend yield is calculated as of the 21st, Samsung Electronics’ main stock is 6.4 percent and preferred stock is 8.7 percent. In particular, since Samsung Electronics has decided on a dividend policy that satisfies the requirements for separate taxation of dividend income starting this year, “big-handed ants” can also avoid separate taxation on financial income, which has less incentive to sell.
2026 has no choice but to continue the scale of shareholder return as an extension of the already announced three-year (2024-2026) plan, but there is also a high expectation that more active shareholder return measures will come out in the next three-year (2027-2029) shareholder return.
Samsung Electronics will hold a board meeting at the end of January next year and announce the size and execution method of the remaining shareholder returns in 2026. Citi Global Market Securities expects dividends (terminal dividends) in the fourth quarter to be worth 30 trillion won.
[Reporter Kim Jerim]