SK Hynix to Announce Q3 Earnings and Shareholder Return Plan Today

[Anchor]

SK Hynix is scheduled to announce its third-quarter earnings today (October 28) along with a shareholder return plan detailing how it will distribute profits back to investors. Attention is focused on whether the company can appease shareholders frustrated by the recent drop in stock prices.

Reporter Lee Seong-hoon has the story.

[Reporter]

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

However, while those who made money tend to talk about it a lot, more people have actually suffered losses.

When a securities firm analyzed the status of its clients, it found that three-quarters of investors holding SK Hynix stock are currently in the red.

Conversely, only one-quarter of them have made a profit.

This is because quite a few people jumped in four months ago when market sentiment was very high—around the time people were talking about whether it would reach the so-called "3 million-won Hynix" mark.

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

With yesterday closing at 1.34 million won, investors trapped on what popular culture calls the "150th or 200th floor" feel that this level of rebound news is not enough to satisfy them.

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

This is because expectations are high that shareholder return measures will be unveiled to pass on increased profits to investors.

Active proposals are expected to include cash dividends as well as measures to increase the value of existing shareholders' stakes by directly buying back company shares and retiring them.

Also being discussed is a plan to pre-announce the scale of treasury shares to be purchased over the next few years and buy them up whenever the stock price drops to support the price.

There are even forecasts that Samsung Electronics will release 80 trillion won and SK Hynix 40 trillion won, totaling 120 trillion won in additional funds.

[Lee Hyo-seob / Head of Financial Industry Research, 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 about 30%, which is remarkably low. Predictability regarding shareholder returns is important.]

These expectations were reflected in yesterday's gains, but conversely, if measures fall short of expectations, disappointment could be even greater.

The controversy over shareholder returns itself is something unprecedented in our financial market, and the joys and sorrows of shareholders are expected to diverge depending on what kind of answers the two companies present.

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