JPMorgan Chase: SK Hynix may further increase shareholder returns by $130 billion

BlockBeats News, August 20th, according to Bloomberg, JPMorgan Chase stated that SK Hynix may add at least $130 billion to shareholder returns by 2027. Previously, the company announced a 40 trillion KRW (approximately $29 billion) stock buyback plan and plans to increase the proportion of free cash flow used for shareholder returns from "not exceeding 50%" to "at least 50%" between 2025 and 2027.

JPMorgan Chase analyst Jay Kwon stated in a report that the key to this 40 trillion KRW buyback plan is SK Hynix raising the shareholder return commitment cap. Under the new return policy, the company is expected to bring "at least 180 trillion KRW in additional shareholder returns" by 2027, equivalent to 16% of the company's current total market value, and is expected to provide support for the recent price decline.

Kwon said: "We believe the worst is behind us, and we expect the stock price sentiment to gradually improve in the midterm, recommending investors to increase their holdings in the stock." He added that the timing of this buyback plan announcement was earlier than market expectations.

SK Hynix's stock price rose 13% on Thursday on the Korean Exchange. Prior to this, the company announced the buyback and cancellation of up to 24 million shares, a scale that will be the largest stock cancellation plan in the history of a Korean listed company. SK Hynix's rise also led to the strength of the Korea Composite Stock Price Index (KOSPI), with competitor Samsung Electronics' stock price rising 10% at one point.

The market believes that further raising expectations for shareholder returns may drive a rebound in South Korean memory chip stocks. Previously, the memory sector has experienced a pullback due to market concerns about the sustainability of AI investments and Chinese competitive pressure. Currently, SK Hynix's stock price is still more than 40% lower than its record high set in June.