[Edaily Reporter Kim Kyung-eun ] Reports suggest that SamsungElectronics(005930)and SK hynix(000660)may embark on additional shareholder returns totaling 120 trillion won. With the price-to-earnings ratios (P/E ratios) of both companies having fallen to around 3 times, analysts say this record-breaking shareholder return could serve as a turning point to resolve the undervaluation of major semiconductor stocks.

Kim Dong-won, Head of Research at KB Securities, stated in a report on the 27th, “At this juncture, where record-breaking earnings coexist with historically low valuations, expanding shareholder returns to an unprecedented scale is expected to serve as a decisive catalyst for resolving the undervaluation of corporate value.”

KB Securities estimated that SamsungElectronics could undertake an additional 80 trillion won in shareholder returns in the future. Based on the assumption that SamsungElectronics has 110 trillion won in remaining funds for shareholder returns from 2024 to 2026, the calculation shows that a total of 110 trillion won in shareholder returns is possible, comprising 70 trillion won in cash dividends and 40 trillion won in share buybacks and cancellations. Excluding the 30 trillion won in cash dividends already confirmed as of the third quarter, the additional capacity for shareholder returns amounts to 80 trillion won.

The possibility was also raised that the scale of shareholder returns could expand further in the medium to long term. If SamsungElectronics maintains its policy of returning 50% of free cash flow (FCF) to shareholders in 2027–2029, as it has done previously, the scale of shareholder returns is projected to increase more than fourfold, from the current 140 trillion won to approximately 600 trillion won.

SK hynix is also expected to be able to provide an additional 40 trillion won in shareholder returns. SK hynix recently completed a 40 trillion won buyback of its own shares for the purpose of cancellation. Analysts expect additional share buybacks and cancellations, as well as expanded special dividends, in line with the company’s policy to return more than 50% of its free cash flow (FCF) to shareholders from 2025 to 2027.

“Considering SK hynix’s robust cash generation capacity driven by its record-breaking earnings, an additional 40 trillion won in shareholder returns is expected in the future,” explained Director Kim. “The results of this earnings growth will translate into expanded shareholder returns and serve as a key driver for the revaluation of corporate value.”

This outlook is underpinned by the steep profit growth of both companies. KB Securities projected that the combined operating profit of SamsungElectronics and SK hynix for 2026–2027 will reach 1,571 trillion won. This amount is 2.1 times the cumulative operating profit of 748 trillion won recorded over the 26-year period from 2000 to 2025. The firm projected that SamsungElectronics and SK hynix’s operating profits in 2027 would reach 555 trillion won and 389 trillion won, respectively, representing year-over-year increases of 51% and 50%.

However, analysts note that stock prices have not yet fully reflected expectations of improved earnings. Recently, SamsungElectronics and SK hynix stock prices have fallen 56% and 41%, respectively, from their respective peaks. Based on projected 2027 earnings, the price-to-earnings (P/E) ratios stand at just 3.2 times for SamsungElectronics and 2.7 times for SK hynix.

The market is closely watching the earnings announcements scheduled for this week by both companies. SK hynix is expected to present specific additional shareholder return plans during its earnings conference call on the 28th, while SamsungElectronics is expected to do so on the 29th.