Samsung Electronics to buy back $7.2 bn in shares

Its shares have lost one third of their value this year, moving in the opposite direction to its peers' shares

Samsung Electronics posts weaker-than-expected operating profit in its chip business in the third quarter

Jeong-Soo Hwang and Han-Shin Park 2

2024-11-17 11:18:21 hjs@hankyung.com

Shareholder value

Samsung Electronics Co. will buy back 10 trillion won ($7.2 billion) in shares over the next year to prop up its share price, which has plunged more than 30% this year to the level of its liquidation value.

The world’s largest memory chipmaker announced the share repurchase plan on Friday — its first buyback program since repurchasing 9.3 trillion won in shares between 2017 and 2018. The buyback will be carried out in phases starting next week.

“In the next three months, 3 trillion won in stock will be repurchased and all of the shares will be cancelled,” Samsung said in a statement.

The shares it is preparing to buy back from Nov. 18 through Feb. 17, 2025 will comprise 50.14 million common shares and 6.91 million preferred shares.

The time frame for subsequent batches of buybacks of the remaining 7 trillion won and how they will be used will be determined later.

As of the end of September, Samsung sits on 103.8 trillion won in cash and cash equivalents.

On Friday, the buyback announcement drove its share price 7.21% higher to close at 53,500 won against the steady Kospi market.

But its shares have slipped 32.8% since the start of the year, in contrast to the surge in rivals’ share prices.

Shares in the world’s largest foundry TSMC have surged 74.5% year-to-date. MediaTek, a Taiwanese fabless semiconductor company, and SK Hynix Inc., the high-bandwidth memory (HBM) leader, have rallied 29.5% and 25.1%, respectively, over the same period.

“We’ll do our best to boost our share price in order to enhance our corporate value for shareholders,” said a Samsung Electronics executive.

Back in 2015 and 2017, Samsung Electronics, the largest stock in Korea in terms of market value, repurchased 11.4 trillion won and 9.3 trillion won worth of shares, respectively.

Buoyed by those repurchases, its share price soared 52.5% through the end of November 2018, when the company wrapped up the buybacks and their retirement.

Last month, Jun Young-hyun, vice chairman and head of Samsung Electronics' semiconductor business, vowed to take drastic steps to improve profitability and regain memory leadership after flagging weaker-than-expected third-quarter earnings.

Write to Jeong-Soo Hwang and Han-Shin Park at hjs@hankyung.com

Yeonhee Kim edited this article.