Korean Media: SK Hynix Plans $71 Billion Shareholder Return Program, with 40% Allocated to Share Repurchases, Equivalent to U.S. Listing Issue Size

SK Hynix is planning its largest-ever shareholder return program, significantly boosting market expectations for capital returns from the world’s largest supplier of high-bandwidth memory.

According to an earlier report by Korea Economic Daily, the company intends to launch a shareholder return program totaling approximately 100 trillion South Korean won (about $71 billion), including about 40 trillion South Korean won for share repurchases. The repurchase size accounts for slightly over 2% of total shares outstanding, basically equivalent to the issue size for its U.S. listing.

If implemented, the scale of this program will far exceed last year’s combined total of approximately 14.3 trillion South Korean won in cash dividends and share cancellations, marking a significant expansion.

Repurchase Size Offsets ADR Dilution Effect

The current share repurchase of about 40 trillion South Korean won represents slightly more than 2% of the company’s total shares outstanding, which is largely comparable to the size of new shares issued for its American Depositary Receipts (ADR) listing in the United States (approximately 2.5% of total shares outstanding).

The market generally views this repurchase as a substantive hedge against equity dilution.

For reference, SK Hynix’s cash dividends last year amounted to 2.1 trillion South Korean won, and share cancellations totaled 12.2 trillion South Korean won, combining to approximately 14.3 trillion South Korean won, with the share cancellation size accounting for about 2.1% of total shares outstanding. If this hundred-trillion-won program proceeds as scheduled, it will represent a several-fold increase compared to last year’s scale.

Quarterly Dividend Announced; Additional Plan to Be Clarified in Q3

Regarding regular dividends, SK Hynix announced on the 7th a quarterly cash dividend of 375 South Korean won per share, with a total dividend amount of 273.3 billion South Korean won. Based on the ordinary share dividend yield, this is approximately 0.02%. The record date is set for the 31st of this month, and the company will complete distribution within one month from the record date.

Regarding additional return arrangements, the company explicitly stated in its announcement that it is "studying additional shareholder return plans to enhance shareholder value, with specific details to be determined and announced in the third quarter."

This statement indicates that the plan, originally scheduled for announcement later this year, has been accelerated to the third quarter, sending a relatively positive signal.

Strong Earnings Expectations Provide Fundamental Support

SK Hynix’s confidence in advancing large-scale shareholder returns stems from its dominant position in the HBM market and the resulting strong earnings expectations.

According to forecasts by financial information platform EpicAI, the company’s revenue this year is expected to reach 345.6 trillion South Korean won, with operating profit of approximately 266.4 trillion South Korean won, representing year-over-year growth of about 256% and 464%, respectively.

During last month’s second-quarter earnings conference call, company management stated that shipments of its sixth-generation HBM product, HBM4, would increase substantially in the second half of the year, and shipments of advanced general-purpose DRAM would also rise. Overall shipments in the second half are expected to exceed those in the first half. This statement provides fundamental endorsement for market expectations of the ultra-large-scale shareholder return program.