SK Hynix shareholder return plan exceeds expectations, with potential return scale reaching 150 trillion KRW by 2027

Odaily News, Kim Sun-woo, an analyst at South Korea's Meritz Securities, stated that SK Hynix announced a shareholder return plan after the market close on August 19, declaring that it will buy back and cancel 40 trillion KRW of its own shares within 3 months. The announcement came earlier than the company's previously stated plan to "announce within Q3," and Kim Sun-woo believes the market may view the timing itself as exceeding expectations. SK Hynix stated that the decision to conduct a large-scale buyback and cancellation was made because the company believes its current stock price does not fully reflect its business competitiveness and cash generation capability. In addition, the company plans to announce new basic dividend and special dividend policies at its Q3 earnings conference in late October. Meanwhile, SK Hynix has raised its shareholder return scale from the previous "within 50% of free cash flow (FCF)" to "above 50% of FCF," and plans to introduce a capital reduction dividend policy next year. Meritz Securities expects SK Hynix's FCF to reach between 250 trillion and 300 trillion KRW by 2027, and based on this calculation, potential shareholder returns could range from 125 trillion to 150 trillion KRW (approximately 89.9 billion to 107.9 billion USD). This plan exceeds expectations in three aspects: timing of the announcement, management's awareness of undervaluation, and future policy expectations. The company is also expected to complete the share buyback within the next 3 months to drive stock price performance.