[Edaily Reporter Kim Kyung-eun ] On the 4th, KB Securities maintained its “Buy” investment rating and target price of 600,000 won for SamsungElectronics(005930), citing expectations for additional shareholder returns within the year.

Kim Dong-won, Head of Research at KB Securities, stated in a report released that day, “Based on shareholder returns over the past three years, we expect additional shareholder returns—such as share buybacks and cancellations, as well as cash dividends—within the year using the remaining 80 trillion won in funds following the third-quarter cash dividend.” The firm also noted that the upcoming shareholder return policy for 2027–2029 is likely to propose a return rate exceeding 50% of free cash flow (FCF).

KB Securities estimated that, assuming 110 trillion won in remaining funds from the recent three-year shareholder return plan, the company could distribute a total of 70 trillion won in cash dividends—30 trillion won in the third quarter and 40 trillion won in the fourth quarter—and repurchase and cancel 40 trillion won worth of its own shares. The firm explained that, assuming the application of separate taxation on dividend income and fulfillment of the 25% dividend payout ratio requirement, the scale of cash dividends would expand to around 70 trillion won, and the remaining funds could be utilized for share buybacks and cancellations. It projected that the dividend yield based on cash dividends in the second half of the year would exceed 4%.

Improved earnings are also expected to support the stock price rally. SamsungElectronics’ operating profit for the second half is estimated at 221 trillion won, a 587% increase year-over-year. With 104 trillion won projected for the third quarter and 117.3 trillion won for the fourth quarter, the average quarterly operating profit is forecast to exceed 100 trillion won. The company is also expected to set new record earnings for five consecutive quarters since the fourth quarter of last year.

Operating profit for the DEVICE (DS) division this year is estimated at 366 trillion won, a 1,370% increase year-over-year. The average selling prices (ASPs) for DRAM and NAND are expected to rise by 279% and 278%, respectively.

The firm also predicted that the memory supply shortage would continue until at least 2028. Following U.S. hyperscalers such as Google and Amazon, major Chinese companies including Baidu, Alibaba, and Tencent are increasingly demanding five-year long-term supply agreements (LTAs). Structural constraints—such as the fact that it takes more than three years from the completion of a new memory production line to full-scale mass production—were cited as a key factor behind the prolonged supply shortage.

Head Kim stated, “If plans for additional shareholder returns within this year and a strengthened three-year return policy are finalized, improved earnings and large-scale shareholder returns will converge, leading to the strongest stock revaluation phase in a decade since quarterly dividends began in 2017.”