Samsung Electronics Shares Drop Over 7% After 110 Trillion Won Shareholder Return Plan
Samsung Electronics shares fell more than 7% in intraday trading on August 24 after the company announced a 110 trillion won shareholder return program, dragging South Korea's KOSPI index down 3% to below 6,700 points. The plan includes 30 trillion won in cash dividends and 15 trillion won in share buybacks, with remaining allocations deferred to 2027. The company's second-quarter operating profit surged 1,813.8% year-on-year to 89.5 trillion won.
After the opening of the South Korean stock market on August 24, Samsung Electronics shares plunged sharply, falling more than 7% at one point during trading, dragging the KOSPI composite index lower. As of the time of writing, the KOSPI had widened its decline to 3%, falling below the 6,700-point level. SK Hynix shares turned from gains to losses, down about 3%.
According to documents filed by Samsung Electronics with regulators, the company plans to distribute approximately 30 trillion won in cash dividends in the third quarter of 2026, including regular quarterly dividends, with the specific amount to be finalized at a board meeting at the end of October. In addition, the company announced it would repurchase approximately 15 trillion won worth of shares for employee compensation. The specific use of the remaining shareholder return funds, including cash dividends, share buybacks, and cancellations, will be decided at a board meeting in January 2027 based on full-year operating results.
Market disappointment with Samsung Electronics' plan stems mainly from two aspects. First, the company only confirmed approximately 30 trillion won in immediate cash dividends, while the use of the remaining funds was deferred to 2027, and no shareholder return principles beyond 2027 were proposed. In contrast, SK Hynix previously announced a 40 trillion won share buyback and cancellation program, and raised its shareholder return ratio to more than 50% of cumulative free cash flow for the 2025-2027 period, offering greater certainty.
Samsung Electronics' second-quarter 2026 earnings report, released on July 30, showed consolidated revenue of 171.5 trillion won, up 130% year-on-year, and operating profit of 89.5 trillion won, up 1,813.8% year-on-year, with both revenue and operating profit setting new quarterly records. Among these, the semiconductor business posted a profit of approximately 89 trillion won, a record high. Both Samsung Electronics and SK Hynix have benefited from rising demand for AI chips, and their share prices had retreated from June highs prior to this announcement.