SK Hynix is preparing a shareholder return program reportedly totaling around 100 trillion KRW (approximately $71 billion), according to The Korea Economic Daily. The plan combines stock buybacks and cash dividends, with the buyback portion earmarked at roughly 40 trillion KRW (about $28.4 billion) – more than 2% of the company's outstanding shares. That proportion is similar to the new shares SK Hynix issued when it listed American depositary receipts (ADRs). The new payout dwarfs last year's 14.3 trillion KRW in shareholder returns, which included 2.1 trillion KRW in cash dividends and 12.2 trillion KRW in share cancellations, meaning the proposed program is about seven times larger. SK Hynix's aggressive capital return stems from its leading position in HBM (high-bandwidth memory), a core storage component for AI infrastructure. The company forecasts this year's revenue of 345.6 trillion KRW and operating profit of 266.4 trillion KRW, up roughly 256% and 464% year over year, respectively. Management said HBM4 shipments will ramp up in the second half, along with advanced DRAM, pushing total shipments above first-half levels. Some market analysts suggest the stronger earnings outlook could support a valuation re-rating. HSBC previously argued that the market has been too pessimistic on SK Hynix's earnings cycle; the new shareholder return plan may be a key catalyst for improved valuation.
SK Hynix is putting together a shareholder return program that combines stock buybacks and cash dividends, with a projected total value of around 100 trillion KRW (approximately $71 billion), according to South Korea's The Korea Economic Daily.
Buyback at 40 trillion KRW
The buyback component is expected to reach about 40 trillion KRW (roughly $28.4 billion), representing more than 2% of the company's total outstanding shares. That ratio is close to the proportion of new shares SK Hynix issued previously for its American depositary receipt (ADR) listing.
Seven times last year's payout
Last year, SK Hynix returned around 14.3 trillion KRW to shareholders — 2.1 trillion KRW in cash dividends and 12.2 trillion KRW in share cancellations. The upcoming plan would be roughly seven times bigger.
HBM strength underpins plan
The aggressive return comes as SK Hynix leads the HBM (high-bandwidth memory) market, the core memory product for AI infrastructure. The company expects this year's revenue to hit 345.6 trillion KRW and operating profit 266.4 trillion KRW, up about 256% and 464% year on year, respectively. On a recent earnings call, management said HBM4 shipments would officially ramp up in the second half, with advanced DRAM output also expanding, pushing total shipments above first-half levels.
Analysts: valuation may improve
Market watchers say rising AI computing demand and stronger profitability could drive a valuation recovery for SK Hynix. HSBC has argued that the market is pricing SK Hynix's earnings cycle too pessimistically, and the new shareholder return plan could be one key factor in improving its valuation.
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