JPMorgan Says SK Hynix Could Return at Least $130 Billion More to Shareholders by 2027

SK Hynix could deliver at least $130 billion in additional shareholder returns by 2027, on top of its 40 trillion won ($28.9 billion) share buyback, JPMorgan said.

Bloomberg reported on Aug. 20 that JPMorgan analyst Jae Kwon wrote in a note that SK Hynix may carry out at least 180 trillion won in additional shareholder returns by 2027. That would be separate from the shareholder return plan the company has already announced and equal about 16% of its current market capitalization.

JPMorgan focused less on the 40 trillion won buyback announced by SK Hynix on Aug. 19 than on the company’s move to effectively raise its shareholder return threshold. SK Hynix had previously said it would allocate up to 50% of cumulative free cash flow from 2025 through 2027 to shareholder returns. It has now raised that to 50% or more.

Based on that policy change, Kwon estimates additional shareholder returns will reach at least 180 trillion won by 2027. He said such a large payout could help put a floor under the stock after a steep correction driven by concerns about the sustainability of artificial intelligence spending and competition from Chinese companies.

Kwon wrote that he believes the worst has passed and that investor sentiment should gradually improve over the medium term. He recommended investors accumulate SK Hynix shares and said the buyback plan was unveiled earlier than the market had expected.

SK Hynix plans to repurchase and retire as many as 24 million shares. The company said the cancellation would be the largest ever by a South Korean listed firm.

The stock rallied sharply after the announcement. SK Hynix rose as much as 13% intraday. The Kospi also advanced on the back of the rebound in SK Hynix, while Samsung Electronics gained as much as 10% during the session.

Expectations for broader shareholder returns are also spreading across South Korea’s semiconductor industry. Money Today reported that Samsung Electronics plans to finalize and announce a shareholder return plan worth more than 100 trillion won ($72.3 billion) after a board meeting later this month.

SK Hynix shares are down more than 40% from their June peak amid concerns about the durability of AI spending by big tech companies and rising competition from Chinese chipmakers. JPMorgan said clearer scope for additional shareholder returns could help revive weakened investor sentiment toward South Korea’s memory chip stocks.