SK Hynix may provide an additional $130 billion in shareholder returns through next year, according to JPMorgan Chase & Co. analyst Jay Kwon. This projection comes after the South Korean memory chipmaker announced a 40 trillion won ($29 billion) share repurchase plan and committed to returning more than 50% of cumulative free cash flow from 2025 to 2027, an increase from its previous "up to 50%" target. Kwon estimates this new commitment could lead to a minimum of 180 trillion won in additional shareholder returns through 2027, which is approximately 16% of the company's current total market value.
The announcement by SK Hynix, which includes buying back and canceling as many as 24 million shares between August 20 and November 19, is considered the largest stock cancellation ever by a South Korean listed company. The news spurred a significant rally, with SK Hynix shares jumping as much as 13% on the Korea Exchange on Thursday. JPMorgan's Kwon believes this move provides a meaningful floor for the share price and expects sentiment to improve, recommending investors to accumulate the stock.
This positive sentiment extended to rival Samsung Electronics Co., whose shares climbed as much as 10% amidst reports that it too is preparing to announce its own shareholder return program, potentially exceeding 100 trillion won. The broader market reaction suggests renewed optimism for South Korea's memory chip sector, which had recently faced concerns about the sustainability of its rally.
