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Samsung Electronics building in Seocho-dong, Seoul. Photo: Kang Eun-gu/Korea Economic Daily
Samsung Electronics Co. shares fell sharply in early trading on Aug. 24 after the company unveiled the largest shareholder return program in the history of South Korea’s stock market.
As of 9:05 a.m., Samsung Electronics was down 15,000 won, or 5.33%, from the previous session at 266,500 won. Samsung Electronics preferred shares dropped 7.73%, while Samsung C&T fell 5.06% and Samsung Life Insurance declined 4.41%.
The decline appeared to reflect disappointment that the plan fell short of market expectations despite its record size.
Samsung Electronics announced after a board meeting on Aug. 21 that it had approved a 2026 shareholder return plan worth about 90 trillion won to 110 trillion won, equivalent to about $64.8 billion to $79.2 billion. That is roughly five times the previous record of 20.3 trillion won, or about $14.6 billion, set in 2020.
The market had expected returns of as much as 150 trillion won, or about $108 billion. That view was based on projections that Samsung Electronics’ operating profit this year will reach 380 trillion won, implying annual free cash flow of 263 trillion won. Investors had expected shareholder returns to equal 50% of free cash flow.
Still, Samsung Electronics may unveil additional shareholder return measures later.
Kim Dong-won, head of research at KB Securities, said Samsung Electronics will share the direction and timing of additional return measures in October, including cash dividends, share buybacks and share cancellations. The company will then confirm the exact size and structure in a filing next January.
He added that Samsung Electronics is expected to disclose its next three-year shareholder return policy, covering 2027 through 2029, in January.
If Samsung Electronics applies its current policy of returning 50% of free cash flow to shareholders to the next three-year plan, the company could generate at least 600 trillion won for shareholder returns over the coming three years, Kim said. That would be more than four times the size of the current three-year plan for 2024 through 2026.
Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com