‘Buy More Samsung Electronics’ vs. ‘No Hope for the Kospi’: Views Split on Stock After $79.2 Billion Shareholder Return Plan

Announces Shareholder Returns of Up to $79.2 Billion

Market Divided After Deferring Details Until Late January

Samsung Electronics posted record results and unveiled plans for shareholder returns of as much as 110 trillion won ($79.2 billion), but investors remain split on the stock’s outlook. Bulls point to a shortage of memory-chip supply and a rebound in high-bandwidth memory, or HBM, competitiveness as reasons for further gains. Skeptics, however, say the delayed rollout of a detailed capital-return plan and the Korean market’s dependence on foreign investor flows make it unclear whether improved earnings will lift the share price.

According to the securities industry on Oct. 30, Samsung said a day earlier that it plans shareholder returns of as much as 110 trillion won this year, including 30 trillion won ($21.6 billion) in cash dividends for the third quarter. The company said specific measures will be finalized at a board meeting at the end of January 2027.

Baek Gil-hyun, an analyst at Yuanta Securities, said tight supply-demand conditions are likely to continue through 2028, making earnings far more visible than in past cycles. He added that Samsung’s next shareholder return policy, due at the end of January, could provide fresh momentum for the stock, backed by additional free cash flow from its memory business. Baek raised his target price for Samsung Electronics to 690,000 won from 630,000 won.

Kim Rok-ho, an analyst at Hana Securities, said the shareholder return plan amounts to 8.1% of Samsung’s current market capitalization, which in his view puts the stock in a deeply undervalued range. He added that long-term supply agreements, or LTAs, have improved medium- to long-term earnings stability, leaving open the possibility of a stronger shareholder return policy from next year. Kim kept his target price at 480,000 won, saying that while he raised next year’s earnings estimates, he also reflected lower valuation multiples for global chipmakers.

Ryu Hyung-geun, an analyst at Daishin Securities, said the issue is one of timing, not direction. He said there has been no change in expectations for a stronger next shareholder return policy. He expects the share buybacks and cancellations anticipated by the market to focus primarily on preferred shares, with the scale at about 25 trillion won ($18 billion).

IBK Investment & Securities struck a different tone, cutting its target price for Samsung Electronics to 350,000 won from 460,000 won. Kim Woon-ho, an analyst at the firm, said fair value stands at 460,000 won based on current profitability and market conditions. Even so, he said upside for the stock would be limited because the shareholder return policy fell short of market expectations and looks less attractive than those of rivals.

Brokerages were largely positive on next year’s earnings and the industry outlook. Ryu said Samsung is believed to be receiving a wave of additional requests for sixth-generation HBM4 supply. He added that 2027 could be a landmark year in which the company secures the top spot in HBM market share. Ryu Young-ho, an analyst at NH Investment & Securities, said the memory industry is undergoing structural changes unlike those seen in past cycles, citing a goal of allocating 60% to 70% of total volume to LTAs by 2030.

Investor reaction was also mixed. One Samsung investor said this year’s 110 trillion-won shareholder return plan, combined with additional measures next year, leaves ample room to enhance shareholder value through dividends and share cancellations. The investor added that with foreign investors having already pulled back sharply from peak levels, Samsung Electronics, the benchmark heavyweight on the Kospi, is likely to draw them back, and that he plans to buy more.

Another investor criticized the structure of the domestic market, saying the problem is not Samsung Electronics but a Korean stock market driven more by foreign investor flows and global macro factors than by corporate fundamentals. Even if earnings improve sharply, the investor said, retail investors have little reason for hope if the Kospi itself remains a market that fails to properly value companies.

With views sharply divided, Samsung Electronics shares were tumbling on Oct. 30. According to EpicAI, an artificial intelligence-based investment information platform, the stock was trading at 217,000 won, down 6.47% from the previous session.

Kang Kyung-ju, Hankyung.com reporter memory@hankyung.com