Citi Maintains SK Hynix as 'Buy' with a Target Price of KRW 310,000

BlockBeats News, August 19th, Citigroup maintained a "Buy" rating on SK Hynix with a target price of 310,000 Korean won. Citigroup stated that the company's strengthened shareholder return plan reflects management's confidence in medium- to long-term growth and is expected to provide substantial downside support for the stock price.

SK Hynix plans to implement a 400 trillion Korean won (approximately $287.7 billion) share buyback plan, involving a total of 24.07 million shares, representing about 3.3% of the total issued shares, and will cancel 100% of the repurchased shares. The buyback plan is expected to be executed between August 20th and November 19th, with the cancellation to be completed within 1 to 2 weeks after the buyback.

In addition, the company has adjusted its shareholder return policy for the years 2025 to 2027 from the previous "within 50% of the 3-year cumulative free cash flow (FCF)" to "above 50%," and has clarified that FCF is calculated as operating cash flow minus capital expenditures, with M&A expenses not deducted from FCF.

Citigroup pointed out that SK Hynix also plans to disclose the specific scale and method of further shareholder return schemes when announcing third-quarter results in October. Analysts believe that the 400 trillion Korean won buyback and cancellation plan is expected to provide valuation support from below, while raising the lower limit of shareholder returns to above 50% of FCF enhances medium- to long-term return certainty.