Samsung Electronics and SK Hynix could pursue record-breaking shareholder returns totaling 120 trillion won based on historic earnings projections, according to a KB Securities report released on the 27th. KB Securities Research Head Kim Dong-won analyzed that Samsung Electronics has 110 trillion won in remaining shareholder return capacity for the 2024-2026 period, while SK Hynix could deliver an additional 40 trillion won in returns for the 2025-2027 period. The analysis comes as both semiconductor giants face historic undervaluation despite unprecedented profit growth, with their combined 2026-2027 operating profit projected at 1,571 trillion won—2.1 times their cumulative earnings from 2000 to 2025.
Samsung Electronics Projects 110 Trillion Won Shareholder Returns for 2024-2026
Kim Dong-won estimated in his report titled 'Record-breaking Semiconductor Shareholder Returns Expected' that Samsung Electronics could distribute a total of 110 trillion won to shareholders during the 2024-2026 period, comprising 70 trillion won in cash dividends and 40 trillion won in share buybacks. Excluding the already confirmed 30 trillion won in cash dividends as of the third quarter, the company has capacity for an additional 80 trillion won in shareholder returns. Kim projected that if Samsung Electronics maintains its existing policy of returning 50% of free cash flow (FCF) to shareholders during the next three-year period (2027-2029), the total shareholder return scale would expand more than fourfold from the previous 140 trillion won to approximately 600 trillion won.
SK Hynix Plans 40 Trillion Won Additional Returns Through 2027
SK Hynix has sufficient capacity for additional shareholder returns, according to the analysis. The company recently completed a 40 trillion won share buyback for cancellation purposes. Following its policy to return more than 50% of free cash flow to shareholders during 2025-2027, the company is expected to expand additional share buybacks and cancellations as well as special dividends. Kim projected that considering SK Hynix's record-breaking earnings and robust cash generation capacity, an additional 40 trillion won in shareholder returns is possible going forward. Combined with Samsung Electronics, the total additional shareholder return scale reaches 120 trillion won.
Combined 2026-2027 Operating Profit Reaches 1,571 Trillion Won
The profit scale for both companies is expected to significantly exceed past performance. According to the report, the combined operating profit of Samsung Electronics and SK Hynix for 2026-2027 totals 1,571 trillion won. This represents 2.1 times the cumulative operating profit of 748 trillion won recorded over the 26-year period from 2000 to 2025. The 2027 operating profit for Samsung Electronics and SK Hynix is projected at 555 trillion won and 389 trillion won respectively. Year-over-year growth rates are estimated to reach 51% and 50% respectively.
Stock Prices Remain 41-56% Below Peaks Despite Earnings Growth
Both companies' stock prices have declined significantly from their peaks. Samsung Electronics and SK Hynix stocks have fallen 41% and 56% respectively from their peak levels. Current price-to-earnings ratios (PER) remain at the 3x level. Kim analyzed that given the expansion of profit generation capacity, the large-scale shareholder returns could serve as a catalyst for corporate value reassessment despite sluggish stock prices. He projected that "at this point where record-breaking earnings and historic undervaluation coexist, the expansion of shareholder returns will become a decisive catalyst for resolving undervalued corporate value."
FAQ
What shareholder return capacity did KB Securities project for Samsung Electronics?
KB Securities Research Head Kim Dong-won projected that Samsung Electronics has 110 trillion won in remaining shareholder return capacity for the 2024-2026 period, comprising 70 trillion won in cash dividends and 40 trillion won in share buybacks. Excluding already confirmed 30 trillion won in Q3 dividends, an additional 80 trillion won in returns is possible.
How much combined operating profit did the report project for 2026-2027?
The KB Securities report projected that Samsung Electronics and SK Hynix will generate combined operating profit of 1,571 trillion won during 2026-2027. This represents 2.1 times their cumulative operating profit of 748 trillion won recorded over the 26-year period from 2000 to 2025.
