SK Hynix Shareholder Return, Samsung Electronics Expected to Exceed 100 Trillion Won... Korean Stock Market Expected to Rebound

In the US market, shareholder return policies are seen as a natural part of corporate management and have limited impact on the market. However, in the Korean stock market, shareholder returns act as a very strong expectation factor for investors and significantly affect stock prices.

Park Myung-seok mentioned, "In the domestic stock market, this weight is definitely different," emphasizing the importance of shareholder return policies in the Korean market.

An analysis suggested that Samsung Electronics' 100 trillion won shareholder return plan might fall short of market expectations. Kim Jang-yeol stated that a shareholder return of around 100 trillion won could actually disappoint the market.

This argument is based on the view that 100 trillion won would not meet market expectations, considering Samsung Electronics' estimated operating profit consensus. Compared to SK Hynix's policy of returning 50% of its free cash flow (FCF), expectations for Samsung Electronics are bound to be even higher.

An analysis suggests that the actual scale of shareholder returns by SK Hynix could significantly increase following its announcement to return over 50% of free cash flow (FCF). Kim Jang-yeol estimated cumulative FCF from 2025 to 2027 to be about 380 trillion won, implying that the return amount could exceed 150 trillion won.

This means that if SK Hynix's operating profit surpasses expectations, the actual shareholder return amount could be even larger. While the company did not provide specific figures, the market is expecting up to 150 trillion won.

SK Hynix's current policy is based on future cash flows, so the specific return amount may be fluid depending on performance.

These projections act as a positive signal for SK Hynix shareholders and are expected to impact future stock prices.

Foreign investors were observed selling 3,500 futures contracts. Park Myung-seok analyzed that this move might be intended to partially hedge today's stock market gains.

This is interpreted as a strategic position adjustment by foreign investors to prepare for current market volatility and respond to tomorrow's market uncertainties. Investors need to maintain memory semiconductor-related stocks in their portfolios while seeking hedging options in other sectors.

The US Treasury announced it would double the size of its long-term bond buyback program. The move, from an initial $2 billion to $4 billion, demonstrates the government's strong commitment to stabilizing interest rates.

Park Myung-seok explained, "They will buy about double what they used to buy. It was $2 billion, but now it's $4 billion."

This is expected to ease bond supply and demand and reduce upward pressure on market interest rates. However, it remains to be seen whether this measure will lead to long-term interest rate stability.

The market views the Treasury's decision positively and is focusing on the future stabilization of the bond market.

An analysis suggests that share buybacks are more effective in preventing declines than directly catalyzing stock price increases. Kim Jang-yeol expects that past sharp drops will be curbed by share buybacks.

Share buybacks are conducted by companies announcing and purchasing a fixed amount daily. This provides steady buying pressure to the market, strengthening stock price rigidity on the downside.

"Now, it will probably be rare for stock prices to fall 8% when they used to fall 3-4%," said Kim Jang-yeol. Therefore, investors can expect relatively lower risks of sharp stock price drops for companies engaged in share buybacks.

Such share buybacks will be an important means of protecting corporate value and enhancing shareholder value amidst market uncertainty.

Doubts have been raised as to whether the US Treasury's announced doubling of its bond buyback program can fully calm the market. Jang Ho-jin pointed out the limitations of the Treasury's solo response when the Federal Reserve is unable to act.

While the market views the Treasury's efforts positively, concerns are being expressed that it may be insufficient to resolve structural issues.

Former President Donald Trump reportedly strongly urged Congress to pass the 'Clarity Act' during a meeting with crypto stakeholders on August 19. Jang Ho-jin explained that this bill aims to ease cryptocurrency regulations by classifying cryptocurrencies as commodities rather than securities.

The passage of the Clarity Act is interpreted as a move to incorporate cryptocurrencies into the institutional framework and promote market revitalization. This could act as a positive signal for cryptocurrency investors.

Trump's remarks can also be seen as part of his presidential campaign, a strategy to gain votes from the cryptocurrency market. Attention is focused on the future legislative process in Congress.

Despite SK Hynix's announcement of its largest-ever share buyback and cancellation, skepticism has been raised that this measure alone will not lead to a significant surge in stock prices. Jang Ho-jin expressed caution about the stock price boosting effect of share buybacks and cancellations.

The current buyback volume is only 3-4% of total shares, which is insufficient to significantly increase stock liquidity, according to the analysis.

"Share buybacks and cancellations have increased significantly. But it's rare for stock prices to double or triple just from the buyback and cancellation itself," Jang Ho-jin noted, pointing out that shareholder return policies rarely cause stock prices to surge on their own.

An analysis suggests that companies developing vaccines and cancer treatments based on mRNA technology could benefit positively, potentially forming a new theme. Jang Ho-jin mentioned issues concerning related companies such as Moderna, emphasizing the need to pay attention to mRNA-related stocks.

He suggested that investors consider a short-term approach with a small amount (within 5% of their portfolio). This strategy aims to capture opportunities while being prepared for potential volatility in the early stages of a new theme's formation.

mRNA technology has proven its efficacy during the COVID-19 pandemic and has the potential to expand into various disease treatment areas in the future.

The fact that the US 30-year Treasury yield has peaked in the short term and is declining is considered a positive sign. Yoo Chang-hee commented, "In any case, I would say that the stabilization of the 30-year Treasury yield is positive."

While Secretary Bescent's buyback measures are predominantly seen as temporary, the market is focusing on short-term interest rate stability.

It has been assessed as a fact that current market liquidity has deteriorated compared to the first half of the year. CEO Yoo Chang-hee emphasized the importance of securing liquidity, stating, "Liquidity governing everything ultimately means that funds must flow in."

In this situation, former President Trump's urging for the 'Clarity Act' and the subsequent surge in Bitcoin are drawing attention as potential signals that could bring new capital flows to the market.

There are also expectations that the revitalization of the cryptocurrency market could expand the overall financial market's liquidity pool. However, if liquidity deterioration continues, it could weigh on the overall market.

SK Hynix's announcement of a 40 trillion won share buyback and cancellation has significantly raised market expectations for Samsung Electronics' shareholder return policy. CEO Yoo Chang-hee believes that SK Hynix's announcement will pressure Samsung Electronics to present a shareholder return plan of at least 150 trillion won.

"If SK Hynix has created such shareholder return events, I feel that Samsung Electronics should talk about at least 150 trillion won," emphasized CEO Yoo Chang-hee.

The market currently has uncertainty regarding the exact timing of Samsung Electronics' specific announcement (tomorrow or next week), but expectations for a significant shareholder return plan have formed. This could also positively impact Samsung Electronics' stock price.

SK Hynix's groundbreaking shareholder return policy is becoming an opportunity to raise expectations for shareholder value enhancement efforts across the domestic semiconductor industry.

CEO Yoo Chang-hee revealed that he has recently increased his cash holdings to around 30% due to heightened market volatility. This is a strategic measure to respond to uncertain market conditions, intended to prepare for sudden declines.

"I have increased my cash holdings a bit. Because the volatility is so high, should I say this? I'm a bit nervous, so I've slightly reduced it," CEO Yoo Chang-hee candidly stated.

Currently, CEO Yoo Chang-hee's portfolio consists of semiconductors (25%), pharmaceuticals and bio (25%), and ETFs (20%). He emphasized the importance of adjusting sector allocations as market concentration improves.

This demonstrates an investment philosophy that manages risk through diversified investment rather than focusing solely on specific sectors, and flexibly responds to changes in market conditions.

Park Myung-seok revealed that he recently sold all his Bitcoin, which he had held for over a year, to cover relocation expenses. At the time, the Bitcoin return rate was around minus 67%.

Park Myung-seok explained the situation, saying, "I moved house a month ago. And suddenly, I needed a lot of money. With a minus 67% loss, I really needed a lot for the deposit and moving expenses."

This illustrates a situation where he was forced to sell Bitcoin at a significant loss due to personal circumstances. It serves as an example of how unexpected external variables can have a major impact on investments.

A shift in trends has been observed where, unlike in the past when strong semiconductor stock performance led to rising transformer-related stocks, now data center-related companies' stock prices are likely to rise in conjunction with semiconductors. Yoo Chang-hee believes this change signifies new market trends.

"In the past, if semiconductors did well, transformers went up, but now, if semiconductors do well, I think it showed trends where data center-related companies' stock prices might also go up," Yoo Chang-hee explained. This suggests a new correlation is forming as data center construction and expansion directly link to semiconductor demand.

This implies a new correlation is forming as data center construction and expansion directly link to semiconductor demand.

A forecast suggests that Alteogen's stock price has set the stage to rise to 400,000 won. CEO Yoo Chang-hee predicted that Alteogen's strength would have a ripple effect across the entire biotech market, driven by immuno-oncology.

"Alteogen, in particular, I think has laid the groundwork to go up to around 400,000 won today. This could be an opportunity for a shift towards immuno-oncology," Yoo Chang-hee said.

This implies a potential shift in the leading biotech sector from obesity treatments to immuno-oncology. Immuno-oncology is highly anticipated by the market as a next-generation treatment.

Alteogen's movements could positively impact domestic biotech companies and provide new investment opportunities.

Controversy has arisen over whether SK Hynix's timing of its shareholder return policy announcement, immediately after market close, was intended to limit foreign investors' ability to respond. Lee Ji-hwan suggested that the announcement right after 3:30 PM may not have given foreign investors time to use the futures market to respond.

"Foreigners were caught off guard. Since it came out right after 3:30 PM, foreigners couldn't respond. They couldn't use futures," Lee Ji-hwan stated.

Some analysts suggest that this strategic timing was to induce foreign investors to short-cover. However, the specific intentions of Chairman Choi Tae-won and the management team cannot be confirmed.

Foreign investors likely intended to sell more until today, based on movements in the US options market, and act tomorrow, but the announcement left them with no choice but to short-cover, according to analysis.

Concerns have been raised about the possibility of artificial volatility appearing in the market on US options expiry day. Lee Ji-hwan warned that techniques could be used to maximize premiums during options expiry.

"If they hit it fast and hard, the option price could be three times, not two times, and Tuesday's sharp drop was clearly to raise option prices," Lee Ji-hwan explained. This suggests that investors should observe the situation rather than immediately reacting to irrational crash news.

He analyzed market adjustment mechanisms through past cases like 'Turbocont' and urged caution regarding unusual phenomena that appear on options expiry day.

Investors should be aware of potentially abnormal market movements that may occur on options expiry day and approach them cautiously.

CEO Lee Ji-hwan stated that the recent 49% drop in KOSDAQ over a month and 45% drop in KOSPI are the first such plunges he has experienced in his 33 years of stock investing. Lee Ji-hwan assessed this as a very rare and exceptional situation that is difficult to generalize.

"I've never seen this in my 33 years of stock investing. So it happened once in 33 years. It's difficult to generalize it," Lee Ji-hwan commented, emphasizing that this downturn is historically very special.

This suggests that the current market situation has entered a new phase that cannot be explained by past patterns. Investors need to be aware of this unusual situation and approach it cautiously.

An analysis suggests that hedge funds are using options expiry to crash big tech stock prices and then buy them at a lower price. Lee Ji-hwan described this as a 'have your cake and eat it too' strategy, aiming for both put option profits and low-priced stock purchases.

"Then, when it falls, they profit from options, and after it ends, they buy stocks at a lower price. That's having your cake and eating it too. So, the basic structure for hedge funds is this," Lee Ji-hwan said.

It was also argued that the decline in the US semiconductor index could actually signal a surge in domestic semiconductor companies. This emphasizes the need to watch the impact of hedge funds' strategic moves on the domestic market.

Investors should be mindful of the possibility of such market manipulation by hedge funds and approach sharp volatility around options expiry with caution.

An analysis suggests that the critical inflection point for semiconductor supply improvement was the earnings announcements of hyperscaler companies. Lee Ji-hwan assessed that market concerns were resolved as major hyperscalers like Google and Amazon confirmed they would expand CAPEX investments next year.

"I think they looked at the earnings announcements of those hyperscalers and thought, 'Okay, this is a level where we can bet to some extent.' So, although it wasn't the most apparent, that became the most important inflection point momentum," Lee Ji-hwan emphasized.

Various concerns about the semiconductor market, such as the peak theory, China risk, and insufficient shareholder value enhancement, were largely resolved through the hyperscalers' earnings announcements.

This acts as a significant factor raising expectations for the recovery of the semiconductor industry and is expected to positively impact the stock prices of semiconductor-related companies in the future.

With interest rate hikes deemed unlikely until the November midterm elections, a strategy was presented to focus on the pharmaceutical and consumer discretionary sectors. Lee Ji-hwan emphasized paying attention to pharmaceutical stocks that could benefit from rate cuts.

"In the case of pharmaceuticals, we should pay attention to the beneficiaries of interest rate cuts. And biotech should be an opportunity to exit. And consumer discretionary will then be positively affected," Lee Ji-hwan explained. He believes the biotech sector is currently overheated, so it should be used as an opportunity to exit.

Citing the example of Estee Lauder's strong performance, he assessed that consumer discretionary could be positively impacted. This suggests that if consumer sentiment improves due to rising expectations of interest rate cuts, it could positively affect the performance of consumer discretionary companies.