J.P. Morgan: SK Hynix may increase shareholder returns by an additional $130 billion

Comparing news, according to Bloomberg, J.P. Morgan said SK Hynix may add at least $130 billion in shareholder returns by 2027. Earlier, the company announced a 40 trillion won (approximately $29 billion) share repurchase program and plans to increase the share of the cumulative free cash flow from 2025 to 2027 for shareholder returns from no more than 50% to at least 50%.

Jay Kwon, an analyst at J.P. Morgan Chase, said in the report that the key to this 40 trillion won repurchase plan is that SK Hynix has raised the shareholder return commitment limit. According to the new return policy, the company is expected to bring in additional shareholder returns of at least 180 trillion won by 2027, equivalent to 16% of the company's current total market value, which is expected to support the stock price after the recent decline.

Kwon said, “We believe the worst period is over, and we expect that in the medium term, stock price sentiment will gradually improve, and investors are advised to increase their holdings in the stock. He added that the buyback plan was announced earlier than market expectations.

SK Hynix shares rose 13% on the Korea Exchange on Thursday. Earlier, the company announced that it would buy back and cancel up to 24 million shares, which will become the largest share cancellation plan in the history of a Korean listed company. The rise in SK Hynix also led to the strengthening of the Korea Composite Index (KOSPI). At one point, the stock price of rival Samsung Electronics rose 10%.

The market believes that further increases in shareholder return expectations may push South Korea's memory chip stocks to rise again. Previously, the storage sector recently recovered due to market concerns about the sustainability of AI investment and competitive pressure from China. Currently, SK Hynix's stock price is still more than 40% lower than the all-time high set in June.