‘Buy More Samsung Electronics’ vs. ‘No Hope for the Kospi’: Views Split on Samsung’s Outlook

Shareholder returns of up to 110 trillion won announced

Reaction mixed as specifics will be finalized in January

Samsung Electronics Co. has posted record earnings and laid out plans for shareholder returns of as much as 110 trillion won ($79.3 billion), but views on the stock remain sharply divided. Optimists cite a shortage in memory chip supply and a recovery in competitiveness in high-bandwidth memory, or HBM, as reasons the shares can climb further. Skeptics, meanwhile, say the delay in detailing the shareholder return plan and the Korean market’s dependence on foreign investor flows make it unclear whether better earnings will lift the stock.

According to the financial investment industry on October 30, Samsung said the previous day that it plans shareholder returns of as much as 110 trillion won this year, including 30 trillion won in cash dividends for the third quarter. The company said the specifics will be finalized at a board meeting in late January 2027.

Baek Gil-hyun, an analyst at Yuanta Securities, said tight supply-demand conditions are likely to persist through 2028, making earnings more visible than in past cycles. That, together with room for additional free cash flow from the memory business, could make the next shareholder return policy due in late January a fresh catalyst for the stock. Baek raised his target price to 690,000 won from 630,000 won.

Kim Rok-ho of Hana Securities said the shareholder return plan amounts to 8.1% of Samsung’s current market capitalization, which he views as evidence the stock is deeply undervalued. He added that stronger shareholder returns from next year cannot be ruled out, given that long-term supply agreements, or LTAs, have helped secure mid- to long-term earnings stability. Kim maintained his target price at 480,000 won, saying he lifted next year’s earnings estimates but also factored in lower valuation multiples for global chipmakers.

Ryu Hyung-geun at Daishin Securities said shareholder returns are a matter of timing rather than direction. He added that there has been no change in the expected strengthening of Samsung’s next shareholder return policy. Share buybacks and cancellations anticipated by the market are likely to focus first on preferred shares, with the scale put at about 25 trillion won ($18.1 billion), he said.

IBK Investment & Securities offered a contrasting view, cutting its target price for Samsung 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 in the stock will be limited because the shareholder return policy fell short of market expectations and could make Samsung less attractive than its rivals.

Brokerages were broadly aligned in their positive outlook for next year’s earnings and the industry. Ryu said Samsung appears to be receiving a wave of additional requests for sixth-generation HBM, or HBM4, supply. He called next year a potentially landmark year in which the company could secure the top spot in HBM market share. Ryu Young-ho of NH Investment & Securities said the memory industry is undergoing structural change unlike past cycles, citing a goal of allocating 60% to 70% of total volume to LTAs through 2030.

Investor reaction is also split. One Samsung investor said this year’s 110 trillion won ($79.3 billion) 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 foreign investors have already pulled out significantly from recent highs and are likely to return to Samsung, the Kospi’s largest stock, prompting plans to buy more.

Another investor took the opposite view, saying the problem is not Samsung itself but a domestic stock market driven more by foreign flows and global macro variables than by corporate fundamentals. Even if earnings improve substantially, the investor said, there is little hope for retail investors if the Kospi remains a market that fails to properly value companies.

With opinion on Samsung increasingly polarized, the stock was falling sharply on October 30. According to EpicAI, an AI-based investment information platform, Samsung was trading at 217,000 won, down 6.47% from the previous session.

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