SK hynix to repurchase and cancel 4 trillion KRW in shares, raising shareholder return target to at least 50% of free cash flow

Odaily Planet Daily reports: Analyst Jukan of Citrini posted on X that SK hynix’s board approved on August 19 the repurchase and cancellation of KRW 4 trillion worth of treasury shares. Based on the previous day’s closing price of KRW 1.662 million per share, the company plans to repurchase approximately 24.07 million shares, representing about 3.3% of total issued shares. The repurchase will commence on August 20 and last approximately three months, after which all repurchased shares will be canceled. This will be the largest share cancellation ever executed by a South Korean listed company. SK hynix stated that, given the company’s business competitiveness, cash generation capability, and medium- to long-term growth prospects, the current stock price does not fully reflect its intrinsic value. As of the end of the second quarter, the company’s net cash position stood at approximately KRW 69 trillion, with significant improvement in cash generation. SK hynix will also accelerate implementation of its existing shareholder return policy, which aims to return up to 50% of cumulative free cash flow from 2025 to 2027; it plans to raise the shareholder return target from “up to 50% of cumulative free cash flow” to “at least 50%.” Assuming its financial stability goals progress as planned, the company intends to continue shareholder returns while maintaining a stable financial structure. SK hynix plans to combine share repurchases and cancellations with cash dividends and considers expanding dividends through measures such as increasing fixed dividends and paying special dividends. The specific scale and structure of additional shareholder returns will be determined by the board and announced alongside the company’s third-quarter results.