An aerial view of Samsung Electronics' semiconductor campus in Pyeongtaek [Samsung Electronics]
An aerial view of Samsung Electronics' semiconductor campus in Pyeongtaek [Samsung Electronics]

Markets are buzzing with expectations that Samsung Electronics will announce a shareholder return program worth around 150 trillion won ($108 billion) this month — which would be the largest ever by a listed Korean company. Securities analysts say the move could serve as a powerful catalyst not only for Samsung's own valuation but for a broader rerating of the entire Kospi market.

According to industry sources, the shareholder return package Samsung is expected to announce soon will likely fall in the range of 100 trillion won to 150 trillion won. The announcement would follow SK Hynix, which unveiled a 40 trillion won share buyback and cancellation plan last week, riding a semiconductor "super cycle." Samsung Electronics is also expected to put a shareholder return agenda — centered on share buybacks and a special dividend — to a board vote in the near future.

Kim Dong-won, a researcher at KB Securities, said Samsung's operating profit, which stood at 44 trillion won last year, is forecast to surge to 381 trillion won this year and 575 trillion won next year. "Strong earnings growth is rapidly expanding the capacity for shareholder returns as well," Kim said.

KB Securities estimated that if Samsung applies a policy of directing 50 percent of its cumulative three-year (2024–2026) free cash flow toward shareholder returns, the special dividend alone would exceed 100 trillion won. Free cash flow refers to the cash a company generates over a given period after subtracting taxes, operating expenses and capital expenditures.

Kim said that if the cash dividend portion of the special dividend is expanded, the resulting high dividend yield would likely allow Samsung's share price to settle in the 300,000-won range in the short term. "Samsung Electronics should be seen as a representative undervalued stock that combines earnings growth with dividend appeal," he said, adding that at its current price-to-earnings ratio of around four times, the stock appears poised to enter a full-fledged valuation normalization and rerating phase.

Son In-jun, a researcher at Eugene Investment & Securities, said Samsung's shareholder return capacity this year would reach the mid-100 trillion won range. "The first shareholder return plan, expected to be announced soon, should have a positive impact on the supply-demand environment and help restore foreign investor sentiment," he said.

Son added that Samsung is expanding its leadership across the board — combining pricing power, long-term demand visibility, memory chip process technology, a growing customer base in advanced foundry, and a strategy to expand smartphone market share, all reinforced by proactive shareholder returns.

Some analysts expect this year to mark the start of a full-scale shareholder return era. Kim Young-geon of Mirae Asset Securities said next year would be the true first year of meaningful returns. He explained that over the past nine years, Samsung had paid a fixed annual dividend of 10 trillion won — roughly 50 percent of an assumed 60 trillion won in free cash flow every three years. "But starting next year, the three-year cumulative free cash flow is estimated at more than 600 trillion won even on a conservative basis, meaning the theoretical return pool is 10 times larger if the payout ratio stays the same," he said.

Samsung's share price, however, remains well below its previous peak. Thursday's closing price was down 27.6 percent from the intraday all-time high of 374,500 won recorded on June 19. The securities industry is closely watching how the shareholder return announcement will affect the stock going forward.

SK Hynix, which announced its 40 trillion won shareholder return plan after the market close on Wednesday, saw its share price surge 12.7 percent on Thursday. Samsung Electronics also closed up 9.5 percent on Thursday on expectations of its own shareholder return announcement.

Korea Investment & Securities holds the highest target price for Samsung at 650,000 won. Other brokerages have set targets of 600,000 won (KB Securities), 560,000 won (Daishin Securities), 450,000 won (Shinhan Investment) and 370,000 won (Mirae Asset Securities).


jiyun@heraldcorp.com