[Anchor]
Though they breathed a sigh of relief today (October 27), both SK Hynix and Samsung Electronics still face their next hurdles. Following tomorrow and the day after, the two companies are scheduled to successively announce their plans on how to return their earnings to shareholders. Attention is focused on whether these announcements can lead the Kospi's upward trend once again.
This is a report by Reporter Lee Seong-hoon.
[Reporter]
You have probably heard stories from people around you making a fortune by buying stocks in Samsung Electronics or SK Hynix at least once.
However, leaving aside those who boast about making money, more people have actually suffered losses.
When a securities firm analyzed the situations of its customers, three-quarters of investors holding SK Hynix stock are currently in the red.
Conversely, only a quarter have made a profit. This is because a considerable number of people bought in four months ago when the market sentiment was soaring, amid talks of whether it would reach the so-called "3 million won SK Hynix."
About 30% of investors entered when the stock price was over 2 million won, and even if we cut it off at 70%, the entry price stands at 1.36 million won.
With today's closing price at 1.34 million won, investors trapped on the metaphorical 150th or 200th floors are far from satisfied with this level of rebound news.
This is why the third-quarter earnings announcements by SK Hynix tomorrow and Samsung Electronics the day after are crucial.
Expectations are running high that measures to return increased profits to shareholders will be unveiled.
In addition to basic cash dividends, active measures are anticipated, such as the company directly buying back its own shares and retiring them to increase the value of existing shareholders' stakes.
There is also talk of pre-announcing the scale of treasury shares to be purchased over the next few years and buying them up whenever stock prices drop to support prices.
Predictions even suggest that Samsung Electronics could shell out 80 trillion won and SK Hynix 40 trillion won, totaling 120 trillion won in additional returns.
[Lee Hyo-sebr / Director of Financial Industry Division, Korea Capital Market Institute : If you look at U.S. big tech companies, they return close to 70% to 90% of their free cash flow to shareholders. Korean listed companies only manage around 30%, which is remarkably low. Predictability regarding shareholder returns is crucial.]
These expectations were reflected in today's gains, but conversely, if measures fall short of expectations, the disappointment could be even greater.
The debate over shareholder returns itself is something unprecedented in our financial market, and the fortunes of shareholders are expected to fluctuate depending on the answers the two companies put forward.
(Photo: Shin Jin-su | Graphics: Kim Min-young | Video Editing: Yoon Tae-ho)
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