[Edaily Reporter Kim Kyung-eun ] All eyes are on whether SamsungElectronics(005930)will see its stock price rebound following the announcement of a shareholder return plan worth up to 110 trillion won. Immediately after the announcement, the stock price fluctuated in after-hours trading as disappointed investors sold off their shares. However, analysts in the securities industry believe this shareholder return plan is highly likely to lead to a revaluation of the company’s stock in the long term and serve as a driving force for an overall rise in the stock market.

According to MP Doctor on the 23rd, SamsungElectronics closed at 281,500 won on the 21st, up 10,500 won (3.87%) from the previous trading day. However, after SamsungElectronics disclosed its shareholder return plan shortly after 5:00 p.m. that day, the stock closed at 270,000 won on the Nextrade (NXT) after-hours market—a 4.1% drop from the closing price.

SamsungElectronics announced that it held a board meeting on the same day and approved a plan to implement shareholder returns totaling 90 trillion to 110 trillion won this year. This amount represents 50% of the free cash flow (FCF) for the three-year period from 2024 to 2026, minus the 29.3 trillion won already returned to shareholders last year and the year before. SamsungElectronics plans to first distribute approximately 30 trillion won in cash dividends this year, including the regular dividend for the third quarter. This amounts to a dividend of 5,000 won per share, with specific details to be determined at a board meeting in late October.

This shareholder return is the largest in the history of South Korean listed companies. However, some voices of disappointment have emerged in the market, as there had been optimistic forecasts that SamsungElectronics would allocate up to 200 trillion won for shareholder returns this year. Previously, SamsungSecurities projected that the scale of SamsungElectronics’ new shareholder return policy could range from a minimum of 100 trillion won to a maximum of 200 trillion won annually. It estimated that the special dividend alone would amount to 100 trillion won.

Kim Dong-won, Head of Research at KB Securities, stated in a report on SamsungElectronics written prior to this announcement, “If the policy of allocating 50% of cumulative free cash flow (FCF) over the past three years (2024–2026) to shareholder returns is applied, the special dividend within the year, based on the remaining funds, is estimated to exceed 100 trillion won,” and He added, “If the proportion of cash dividends within the special dividend increases, the high dividend yield will come into focus, and SamsungElectronics’ stock price could stabilize in the 300,000 won range in the short term.”

The fact that no specific details other than cash dividends have been finalized in this shareholder return plan is also seen as a factor contributing to the disappointment. SamsungElectronics plans to decide on the details regarding the 60 trillion to 80 trillion won—excluding the 30 trillion won in cash dividends—at a board meeting in January of next year, once this year’s business performance is finalized. Unlike SK hynix, which expanded its shareholder return target from “up to” 50% of free cash flow (FCF) to “at least” 50%, Samsung Electronics did not propose any additional shareholder return measures.

Despite the market’s disappointment, securities analysts believe that the successive large-scale shareholder return policies by KOSPI blue-chip stocks such as SamsungElectronics and SK hynix will lead to a revaluation of the stock market as a whole. In particular, analysts suggest this will serve as an opportunity to normalize valuations, as domestic semiconductor stocks have been relatively undervalued despite their high return on equity (ROE).

Kim Jong-min, a senior research fellow at SamsungSecurities, stated, “The Korean stock market is currently in a phase where valuation criteria are shifting from a simple profit ‘cycle’ (price-to-earnings ratio, or P/E ratio) to a ‘trend’ of shareholder value return (sustainable ROE),” adding, “The regularization of shareholder returns based on profit growth will be the key driver to resolve the chronic ‘Korea discount’ and lead to a revaluation of the overall stock market.”

Lee Jae-won, an analyst at Yuanta Securities Korea, also emphasized, “If capital efficiency improves through repeated share buybacks, the market will have grounds to assign a higher price-to-book ratio (PBR),” adding, “Expanded shareholder returns are also seen as factors contributing to valuation re-rating and the alleviation of the Korea discount.”

Meanwhile, this week (August 24–28), in addition to the shareholder return policies of SamsungElectronics and SK hynix, NVIDIA’s earnings release and the Jackson Hole Symposium are cited as key variables that will determine the direction of the KOSPI. Analysts suggest that strong earnings and positive guidance from NVIDIA could contribute to improved investor sentiment toward artificial intelligence (AI) and semiconductors, potentially triggering a second rebound in the domestic stock market. The Jackson Hole Symposium is expected to influence the stock market’s direction, as it offers insight into the U.S. Federal Reserve’s (Fed) monetary policy trajectory.