Abstract:
According to industry sources, SK Hynix (000660.KS) is preparing to announce a new shareholder return plan with a scale of 50 trillion to 60 trillion won (equivalent to 35 billion to 42 billion U.S. dollars). Coupled with the 40 trillion won in share repurchases and write-offs it has recently completed, the memory chip manufacturer's total shareholder returns this year will reach a record 100 trillion won. Benefiting from the market for AI memory chips, the company's performance is expected to achieve a historic increase, and it plans to promote its valuation into the first echelon in the world through generous shareholder return measures.
Industry insiders said on the 26th that SK Hynix will finalize this year’s shareholder return plan through a resolution of the board of directors on the 28th and disclose it together with the third quarterly report on the same day. The company's policy is to use more than 50% of free cash flow for stock repurchases, cancellations and dividends, and it is currently reviewing a total return scale of 90 trillion to 100 trillion won. Brokerages estimate SK Hynix's free cash flow this year will be about 200 trillion won.
SK Hynix has previously completed 40 trillion won in share buybacks and cancellations, the largest in the history of Korean listed companies. On this basis, the company plans to add an additional 50 trillion to 60 trillion won in buybacks and special dividends. An industry insider said: "Large-scale repurchases and cancellations have been implemented, and this plan will focus on special dividends. However, taking into account the demands of institutional investors and foreign capital, the company is also simultaneously considering additional partial repurchases and cancellations."
SK hynix’s planned total shareholder return this year is seven times that of last year, setting a record high. It will compete with industry leader Samsung Electronics for the largest shareholder return among Korean companies; Samsung has an advantage in profits and cash reserves. In August this year, Samsung Electronics released a signal that it plans to spend 90 trillion to 110 trillion won in shareholder returns this year, aiming to take the top spot among Korean companies in this project.
SK Hynix’s closing price that day was 1.275 million won, far lower than the historical closing high of 2.919 million won set on June 22.
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