The KOSPI is surging on news of expanded shareholder returns from SK Hynix. The KOSPI rose for the third consecutive trading day, triggering a buy-side sidecar (futures market circuit breaker). With growing expectations for expanded shareholder returns from Samsung Electronics as well, attention turns to whether the previously sluggish KOSPI can rebound again.
As of 10:32 a.m. on the 20th, the KOSPI was trading at 6,808.48, up 337.31 points (5.21%) from the previous trading day. The KOSPI, which opened higher today, widened its intraday gains, triggering a buy-side sidecar (futures market circuit breaker). This marks the 49th time this year that a sidecar (futures market circuit breaker) has been triggered. If counting only buy-side triggers, it is the 24th time.
SK Hynix is leading the KOSPI's rise. SK Hynix was trading at 1.666 million won, up 166,000 won (11.07%) from the previous trading day. According to Mirae Asset Securities, SK Hynix's contribution to the KOSPI's rise reached 99.06 percentage points.
Expectations that Samsung Electronics will also expand shareholder returns have pushed Samsung Electronics' stock price up by 7.27%.
SK Hynix announced yesterday after market close via public disclosure that it would acquire and burn 40 trillion won worth of its own shares as part of expanded shareholder returns. SK Hynix plans to acquire 24.07 million ordinary shares through on-market purchases.
Additionally, SK Hynix stated it plans to return more than 50% of the free cash flow (FCF) generated from 2025 to 2027. This expands its previous shareholder return plan, which was within 50%, to "more than 50%." To enhance shareholder value, SK Hynix will simultaneously pursue share buybacks and burnings along with cash dividends, and is also considering plans to expand dividends, including existing fixed dividends and special dividends.
Park Jun-young, a researcher at Hanwha Investment & Securities, said, "SK Hynix's three-year cumulative FCF is estimated to reach about 491 trillion won." He added, "Even if only the minimum return rate of 50% proposed by SK Hynix is applied, the total shareholder return scale during the policy period will exceed approximately 245 trillion won."
He continued, "Deciding on large-scale returns proactively before this year's and next year's FCF are finalized shows the company's confidence in achieving future cash generation capabilities and financial health goals." He expressed expectations that "if share buybacks and burnings exceeding 100 trillion won materialize, this will lead to a continuous reduction in SK Hynix's outstanding shares and an increase in per-share value."
Experts in the financial investment industry predicted that domestic semiconductor stocks would be revalued as SK Hynix is followed by Samsung Electronics in expanding shareholder returns.
Han Dong-hee, a researcher at SK Securities, said, "Revaluation driven by AI (artificial intelligence) growth and simultaneous improvement in per-share value will take place." He diagnosed that "semiconductor stocks are transitioning from an industry that merely absorbs the growth potential of AI demand to one that converts generated cash into dividends and share reductions, thereby increasing per-share value through compounding." He added, "While shareholder returns may not change corporate valuation, they can change shareholder value," and stated, "We maintain our view on expanding memory sector exposure."
Expectations also arise that the expanded shareholder returns of leading semiconductor stocks will drive KOSPI gains. Kim Dong-won, head of research at KB Securities, forecasted, "In the future, large-scale shareholder returns will act as a powerful catalyst not only for Samsung Electronics' corporate valuation increase but also for revaluation of the entire KOSPI market valuation."
Han Ji-young, a researcher at Kiwoom Securities, said, "A combination is forming: momentum from leading stocks' shareholder returns, stabilization in the surge of long-term U.S. interest rates, and easing of global semiconductor concentration." He added, "Both the KOSPI and KOSDAQ markets, which experienced sharp declines throughout this week, should adopt a basic scenario where stock price recovery resilience improves."
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