SK Hynix (SKHY.US) launches a 40 trillion buyback "spectacle." JP Morgan: Another $130 billion "gift package" may be issued in 2027.

After SK Hynix (SKHY.US) implemented its latest large-scale stock repurchase plan on Wednesday, JPMorgan pointed out that the company is expected to provide shareholders with an additional return of at least $130 billion (approximately 180 trillion won) before next year. On Wednesday, the South Korean memory giant SK Hynix announced it would repurchase and cancel stocks worth 40 trillion won (approximately $28.61 billion), and plans to use at least 50% of its cumulative free cash flow for shareholder returns by next year. The company believes that the current stock price does not fully reflect its value, hence the decision to fully initiate the shareholder return plan. SK Hynix stated that the stock repurchase would begin on August 20 and last for about three months, with all purchased shares being canceled upon completion of the buyback. This stock repurchase and cancellation plan, totaling 40 trillion won, is the largest of its kind in the history of South Korean listed companies. Stimulated by this positive news, SK Hynix's stock price soared by 13% during trading on Thursday on the Korea Exchange (KRX). Analyst Jay Kwon noted in a report that the core highlight of the 40 trillion won (approximately $29 billion) repurchase plan announced by the South Korean memory chip giant is the significant increase in the return ceiling. SK Hynix has currently committed to returning more than half of its cumulative free cash flow (FCF) from 2025 to 2027, whereas the previously set ceiling was "50%." Based on this, Kwon estimated that, in addition to the announced plan, there will be at least "180 trillion won" in additional shareholder returns by 2027. This amount represents 16% of the current total market value, and the analyst believes this move will provide strong support for the stock price following recent sell-offs. Kwon wrote in the report: "We believe the worst period is over and expect a gradual recovery in stock price sentiment in the mid-term. We recommend that investors accumulate shares in batches on dips." He added that the timing of this buyback plan's announcement is significantly earlier than the market generally anticipated. The strong rebound of SK Hynix has also boosted the South Korean benchmark KOSPI index, with its largest competitor, Samsung Electronics Co., seeing its stock price rise by 10% concurrently. Additionally, foreign media citing unnamed industry insiders reported that Samsung plans to finalize and announce a shareholder return plan exceeding 100 trillion won after this month's board meeting. The market's expectations for additional dividends and returns are expected to revitalize the upward momentum in the South Korean memory sector. Previously, stocks in this sector faced continuous pressure due to concerns over the sustainability of capital expenditures from major North American tech clients in AI and growing competitive threats from Chinese manufacturers. As of now, SK Hynix's stock price has retraced more than 40% from its historical high reached in June.