Key points
- SK Hynix is preparing a record payout, reported near 100 trillion won ($70B USD), to be set after its third-quarter results.
- Analysts think Samsung's could reach 200 trillion won ($141B USD), about twice as large, though Samsung hasn't confirmed any figure.
- Together that's a return of cash near 300 trillion won ($211B USD), aimed at two stocks still about half off their June highs.
The Kospi closed just below 7,000 on Friday at 6,977.94, finishing the week 11.49% higher. Samsung Electronics and SK hynix led the rebound, rising about 18.8% and 15.7% over the five sessions. They were the same two chipmakers that drove much of the summer selloff, when the Kospi fell nearly 44% from its June high to its late-July low. Attention has now shifted to how much of their rapidly growing cash flow could eventually be returned to shareholders.
Korean brokerages are beginning to put a price on the potential payouts. At the upper end of their estimates, Samsung could return as much as 200 trillion won ($141B USD) a year, while SK Hynix could distribute up to 100 trillion won ($70B USD). Together, that would put the total near 300 trillion won ($211B USD). Neither company has confirmed those figures. Analysts arrived at them by estimating how much free cash flow the two businesses could generate and how much of it each has promised to return to shareholders.
SK Hynix has given the market the clearer outline. The company has said it will settle on a larger shareholder return after releasing its third-quarter results. Korean outlets have put the possible package near 100 trillion won, including about 40 trillion won ($28B USD) in share buybacks and 60 trillion won ($42B USD) as a cash dividend, tied to the free cash flow expected through 2027. SK Hynix had already declared a quarterly dividend of 375 won ($0.26 USD) on August 7. Last week, I wrote about how expectations for that payout lifted SK Square (SK스퀘어), the holding company that owns about a fifth of SK Hynix, more than they lifted SK Hynix itself.
Samsung's estimate has drawn more attention because it is larger and because the company has not endorsed it at all. Samsung's policy is to return half of its free cash flow to shareholders. With that cash flow expected to be unusually large this year, analysts have worked backward to a possible annual return of between 100 trillion won and 200 trillion won. Kim Dong-won, head of research at KB Securities, put even the bottom of that range in perspective. "Even a shareholder return of just 100 trillion won would put the dividend yield above 7% at the current stock price," Kim said. Samsung's most recent annual return was about 9.8 trillion won ($6.9B USD), which means the low end of the estimate would still represent an entirely different scale.
The crash is part of why this is happening now. Both stocks are still trading at about half their June highs, even after last week's rebound, and a large return of cash is one of the few ways a company can change how its shares get valued after a fall like that. For SK Hynix, Korean coverage has framed the plan as a deliberate bet by SK Group chairman Chey Tae-won to win investors back. For Samsung, the pressure's simpler. Its cash and its cash flow have grown faster than what it pays out, and shareholders have started to ask why.
None of this is settled. The 300 trillion won figure is a ceiling the market has drawn, not a plan on paper, and whether either company gets near it depends on cash flows that turn on how long the memory-chip boom holds. Samsung hasn't given a date, and Korean outlets have said SK Hynix's details could come as early as this month, though the company itself points only to sometime after its third-quarter results. Korea's markets are closed Monday for a substitute holiday, so the wait runs at least into next week.
Sources
- 이투데이, 삼성전자 200조ㆍSK하이닉스 100조⋯역대급 주주환원 기대, on the combined estimates and the dividend-yield math
- 조세일보, SK하이닉스, '100조원대 주주환원' 이르면 이달 발표, on the size and timing of SK Hynix's plan
- 파이낸셜뉴스, 美인플레 공포 잦아들자 화색…삼전 2%·SK하닉 3% 상승 마감, on Friday's close
- Our earlier coverage: why SK Square rose more than SK Hynix on the payout, SK Hynix's third-quarter payout plan
Figures are converted at about 1,420 won to the US dollar. The analyst comment is translated from Korean, and the source titles are in the original Korean. This is general market commentary and not investment advice.
