As Samsung Electronics and SK Hynix announced a large-scale shareholder return policy, domestic stoc..

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사진 확대 Shares of KOSPI, SK Hynix, and Samsung Electronics are displayed on the dealing room electronic board of Hana Bank’s headquarters in Jung-gu, Seoul on the 20th. [Yonhap News]

As Samsung Electronics and SK Hynix announced a large-scale shareholder return policy, domestic stock market investors are paying attention to the two large semiconductor stocks. Despite geopolitical risks and volatility in the global information technology (IT) industry, the market reacted immediately when it came up with drastic measures to increase shareholder value, including large-scale share buybacks and incineration. In particular, attention is being paid to the future direction of the two companies as the battle for leadership in the artificial intelligence (AI) semiconductor market and the rising price of memory semiconductors are combined.

According to FnGuide, a financial information company, Samsung Electronics (2880 times) was the most searched stock by domestic investors from August 18 to 24. SK Hynix (1895 times), the flagship stock of semiconductors, came in second, proving overwhelming interest in the two major stock markets. In addition, individual issue stocks such as Kakao (752 times), Normus (655 times), Unisem (640 times), Solus Advanced Materials (624 times), Protina (622 times), and Galaxy Money Tree (616 times) were listed at the top of the search, but they did not reach the search volume of two semiconductors, Samsung Electronics and SK Hynix.

This overwhelming enthusiasm was also revealed in the stock report search ranking. During the same period, a number of analysis reports dealing with Samsung Electronics and SK Hynix were spotted at the top of the most frequently visited reports by investors, proving that demand for stock market analysis was very high to establish practical investment strategies beyond simple searches.

Recently, Samsung Electronics announced a shareholder return policy worth 90 trillion won to 110 trillion won. It is the largest ever in Korea. Based on this third quarter, about 30 trillion won in cash will be paid as dividends first, and details will be confirmed at the board of directors at the end of October. The local stock market gave a positive assessment of Samsung Electronics’ shareholder return policy. KB Securities analyzed that Samsung Electronics’ announcement will be a strong momentum to firmly support the bottom of the stock price. Kim Dong-won, head of KB Securities’ research division, said, “Samsung Electronics is rapidly growing its capacity to expand shareholder returns along with strong profit growth,” adding, “Samsung Electronics’ stock price, which is currently four times the PER (share price return ratio), will enter a phase of normalization and revaluation of valuation.”

사진 확대 [Yonhap News]

At the same time, Samsung Electronics’ operating profit is expected to rise sharply, because it is difficult to resolve global memory semiconductor supply constraints in a short period of time. “Hyperscalers who want to dominate the AI market prefer a five-year long-term supply contract (LTA) as their basic form for stable memory semiconductor procurement,” Director Kim said. “This will increase the possibility that the supply and demand of memory semiconductors will continue for years to come.”

The stock market also praised SK Hynix’s announcement of shareholder return. SK Hynix unveiled its shareholder return policy before Samsung Electronics. SK Hynix said it would buy 40 trillion won worth of treasury stocks for three months and then incinerate them altogether. It also changed its cumulative free cash flow (FCF) reduction criteria from the range of 50% to more than 50% for 2025-2027.

The common opinion given by local securities firms is that SK Hynix will continue to enjoy differentiated valuation premiums within the industry as it maintains its lead in high value-added memory semiconductor products, adding to its strengthened shareholder return policy.

Hanwha Investment & Securities highly appreciated SK Hynix’s decision to actively return its solid cash flow to shareholders based on its overwhelming technological advantage in the global semiconductor market. “If SK Hynix’s FCF is estimated at 28.8 trillion won in 2025, 191.6 trillion won in 2026, and 270.6 trillion won in 2027, the three-year cumulative FCF amounts to about 491 trillion won,” said Park Joon-young, a researcher at Hanwha Investment & Securities. “Even if only 50% of the minimum reduction rate is applied, the total amount of shareholder return during the policy period is more than 245 trillion won.” “We are paying attention to the possibility of stock buybacks and incineration that far exceed KRW 100 trillion based on the creation of large-scale FCF in the future,” he said. “This will lead to a continuous decline in the number of shares and a rise in value per share.”

사진 확대

Hana Securities also analyzed that SK Hynix’s return plan will be a strong support for the rise in stock prices. Meritz Securities also assessed that SK Hynix came up with an appropriate plan to increase shareholder value at a time when the semiconductor boom coincided with the listing of the US Stock Deposit Certificate (ADR). Kim Sun-woo, a researcher at Meritz Securities, said, “SK Hynix is expected to make all-out efforts to close the gap between main stock and ADR, which is currently about 40% apart. Through institutional improvements and increased ADR issuance, it will be able to lead to a re-evaluation (re-rating) of the quality improvement as well as a rise in main stock prices.”

Meanwhile, SONID (589 times), MICO BioMed (585 times), Genofocus (585 times), Action Square (583 times), Semiconductor (489 times), Exchange Rate (469 times), Data Center (336 times), Robot (297 times), Interest Rate (272 times), and Cosmetics (263 times) were among the top keywords searched last week. Investors are also expected to be interested in the level of long-term U.S. interest rates, which have risen along with Samjeonics.