Industry Insider: Samsung Electronics Shareholder Return Plan Could Reach 150 Trillion Korean Won

BlockBeats News, August 20th. According to the Korean Economic Daily, Samsung Electronics plans to announce a shareholder return plan of approximately 150 trillion South Korean won this month, surpassing the 100 trillion won amount reported by other media earlier today. It is expected to include measures such as stock buybacks and special dividends, with the scale potentially setting a new record for a listed company in South Korea.

Industry sources revealed that Samsung Electronics plans to hold a board meeting this month to review the related shareholder return plan. Earlier, the market had expected the return scale to potentially reach 200 trillion won, but considering the company's basic principle of "using 50% of free cash flow (FCF) for shareholder returns," the final scale is expected to be between 150 trillion and 160 trillion won.

Samsung Electronics executives stated that with the recovery of the memory chip industry, the company's cash generation ability has significantly improved. They are exploring various ways to enhance shareholder value and will determine a plan that can make shareholders feel actual benefits while adhering to the shareholder return principle.

The market believes that this large-scale shareholder return is mainly due to the performance improvement brought by the supercycle of the memory semiconductor industry. Brokerages estimate that Samsung Electronics' full-year free cash flow this year is approximately 263 trillion won, with an estimated cumulative free cash flow during the shareholder return policy cycle from 2024 to 2026 of around 319 trillion won. Calculated based on a 50% return ratio, the total return funds are about 160 trillion won. After deducting the executed and planned 39.1 trillion won, the remaining funds are close to 120 trillion won.

The market expects that Samsung Electronics may use the remaining funds to not only maintain the regular dividend of 1,668 won per share annually, but also to provide additional large-scale special dividends. At the same time, the company may proceed with a large-scale stock buyback and cancellation to reduce concerns about an increase in share circulation due to employee incentives and enhance shareholder value. Industry insiders suggest that following SK hynix, Samsung Electronics' introduction of a large-scale shareholder return plan may become a key factor in driving the valuation of the South Korean stock market.