(Aug 20): SK Hynix Inc may follow up its new mega stock buy-back with additional shareholder returns worth at least US$130 billion (RM525 billion) through next year, according to JPMorgan Chase & Co.

The key takeaway from the 40 trillion won (US$29 billion or RM116 billion) share repurchase announced on Wednesday was the South Korean memory chipmaker’s decision to lift the ceiling on returns, analyst Jay Kwon wrote in a note. SK Hynix is now pledging more than half of its cumulative free cash flow over 2025 to 2027, versus “up to 50%” previously.

Kwon estimates that means “a minimum of 180 trillion won of additional shareholder return” through 2027, on top of the plans already announced. That’s equal to 16% of the stock’s current total market value, and should provide support after the recent sell-off, according to the analyst.

“We believe the worst is behind us and expect share price sentiment to improve gradually from a medium-term horizon and recommend investors to accumulate the stock,” Kwon wrote. The buyback was unveiled sooner than the market expected, he added.

The chipmaker’s shares jumped as much as 13% Thursday on Korea Exchange after announcement of the plan to buy back and retire as many as 24 million shares. The company said it will be the largest stock cancellation ever among South Korea’s listed companies.

The bounce in SK Hynix helped boost the benchmark Kospi, with shares of key rival Samsung Electronics Co climbing as much as 10%. Samsung plans to finalise and announce a shareholder return programme exceeding 100 trillion won after a board meeting this month, MoneyToday reported, citing unidentified industry officials.

Hopes for additional payouts may help renew the rally in South Korea’s memory stocks, which had dropped lately on concerns over the sustainability of AI spending among its Big Tech customers as well as the threat of Chinese competition. SK Hynix shares are still down more than 40% from their June record high.

Uploaded by Tham Yek Lee