SK Hynix Plans $71 Billion Shareholder Return Program, Including $28.4 Billion Stock Buyback, Marking a Nearly Sevenfold Increase from Last Year

August 8th. According to The Korea Economic Daily, SK Hynix is preparing a shareholder return plan totaling approximately 100 trillion Korean won (about $71 billion), including stock buybacks and cash dividends. The expected stock buyback size is around 40 trillion Korean won (approximately $28.4 billion), representing slightly over 2% of the total issued shares, similar to the proportion of newly issued shares for its listing on the US stock market as ADRs, which is about 2.5%. This amount is about 7 times larger than last year's total return size of approximately 14.3 trillion Korean won, which included cash dividends (about 21 trillion Korean won) and stock cancellations (about 122 trillion Korean won).

The dominant position of SK Hynix in the HBM market, the core storage of AI infrastructure, is the fundamental support for SK Hynix to launch such a large-scale return plan. This year, Hynix is expected to achieve a revenue of about 345.6 trillion Korean won and an operating profit of about 266.4 trillion Korean won, representing year-on-year growth of about 256% and 464%, respectively. During the July earnings conference call, SK Hynix has already indicated that the shipment of HBM4 in the second half of the year will be in full swing, and the shipment of advanced process general DRAM will also increase. The total shipment in the second half of the year is expected to exceed that of the first half. Earlier, HSBC pointed out that SK Hynix's stock price implied earnings cycle has plummeted from about 6 years to 2.7 years, pricing it as "excessively pessimistic." The accelerated implementation of this shareholder return plan may serve as a direct trigger for valuation recovery.