Bought SK Hynix and Lost Money... How Much Shareholder Return Will Follow?

[Anchor]

SK Hynix is scheduled to announce its shareholder return plans today (the 28th), detailing how it will distribute its earnings back to investors. Consequently, the fortunes of shareholders are expected to diverge.

Reporter Lee Seong-hoon has the details.

[Reporter]

You have probably heard stories from people around you about making a fortune by buying stocks in Samsung Electronics or SK Hynix.

However, while those who made money talk about it a lot, there are actually far more people who suffered losses.

When a securities firm analyzed the situations of its customers, it found that three out of four investors holding SK Hynix shares are currently in the red.

Conversely, only one out of four has made a profit.

This is because a significant number of investors bought in four months ago when market sentiment was soaring—amid talks of whether the stock would reach the so-called "3 million hynnix" milestone.

About 30% of investors bought in when the stock price was over 2 million won, and even if you look at the top 70%, the entry price is 1.36 million won.

With yesterday's closing price at 1.34 million won, investors trapped on the metaphorical "150th or 200th floor" are hardly satisfied by this level of rebound news.

That is why the third-quarter earnings announcements for SK Hynix today and Samsung Electronics tomorrow are crucial.

Expectations are high that shareholder return measures will be unveiled to distribute increased profits back to investors.

In addition to basic cash dividends, active measures are anticipated, such as the company directly purchasing and subsequently retiring its own shares to enhance the value of stakes held by existing shareholders.

Also being discussed is a plan to pre-announce the scale of treasury shares to be bought over the next few years, stepping in to purchase them whenever prices drop to support valuations.

There are even forecasts that Samsung Electronics could shell out 80 trillion won and SK Hynix 40 trillion won, totaling an additional 120 trillion won.

[Interview / Lee Hyo-seop, Head of Financial Industry Research Division at Korea Capital Market Institute: Looking at U.S. big tech companies, they return nearly 70% to 90% of their free cash flow to shareholders. Korean listed companies only manage about 30%, which is remarkably low. Predictability regarding shareholder returns is crucial.]

While these expectations were reflected in yesterday's gains, disappointment could run even deeper if measures fall short of expectations.

The debate over shareholder returns is unprecedented in our financial market, and the fate of shareholders will likely hang on what kind of answers the two companies put forward.

(Photo: Yonhap News)
(Video by: Shin Jin-soo | Design: Kim Min-young | Video Editing: Yoon Tae-ho)
※ Please note: This article was translated by AI and may contain errors.