Samsung Electronics is reportedly planning a shareholder return plan that exceeds 100 trillion won (about $72 billion), according to South Korean financial news site MoneyToday. This announcement follows rival SK Hynix's $29 billion stock buyback program revealed on August 19. Samsung is expected to use 50% of its free cash flow for shareholder returns, mainly through cash dividends, the report said.
Key Details
SK Hynix's buyback aims to stabilize its shares after a drop of over 50% in two months. The company plans to buy back up to 24 million shares between August 20 and November 19. It will cancel these shares, as stated in a regulatory filing. SK Hynix has also committed to returning more than 50% of its total free cash flow from 2025 to 2027, which could reach around $170 billion, according to Bloomberg calculations.
Background
Both companies' announcements come amid worries about the sustainability of AI hardware spending, raising questions among investors. Citigroup noted that SK Hynix's plan could provide a solid floor for its share price and boost investor confidence. After the announcements, SK Hynix shares rose by as much as 13%, while Samsung's stock increased more than 10% at its peak on the same day.
Related coverage: US Stocks Rebound as Treasury Yields Decline on Buyback Plan, BHP Reports 30% Profit Rise, Highest Dividend in Four Years.
The announcements are likely to improve investor sentiment in the South Korean tech sector, especially for Samsung and SK Hynix shares. Increased shareholder returns could lead to higher stock values and offer support amid ongoing market volatility. Investors will look for more details on Samsung's shareholder return plan, expected to be revealed soon, as well as the performance of SK Hynix's stock buyback program.
Based on reporting by: businesstimes.com.sg