Samsung Electronics to Announce 150 Trillion Won Shareholder Return… Largest Ever

North Korea's missile launch immediately after Vice Department Director Kim Yo-jong's statement has put U.S. diplomacy in a difficult position. Kim Yo-jong stated the day before the missile launch that she had no interest in dialogue with the U.S., making the missile launch situation even more unpredictable.

In response, the U.S. expressed efforts to reduce joint ROK-U.S. exercises and resume dialogue, and the U.S. Indo-Pacific Command reaffirmed its commitment to defending allies.

Samsung Electronics is expected to announce a shareholder return plan worth 150 trillion won. This information, stemming from market demands and corporate competition, is expected to be finalized based on the principle of returning 50% of free cash flow (FCF) to shareholders.

Some suggest the shareholder return could increase to as much as 200 trillion won, which would be the largest shareholder return in Korean corporate history.

Samsung Electronics and SK Hynix differ in their shareholder return methods. SK Hynix focuses on treasury stock retirement, while Samsung Electronics is estimated to have a higher dividend ratio.

In Samsung Electronics' case, a large-scale treasury stock retirement could create issues with the shareholding ratios of existing shareholders like Samsung Life Insurance and Samsung Fire & Marine Insurance, specifically regarding the limit on affiliate stock ownership under the Insurance Business Act. Thus, Samsung tends to prefer dividends.

Due to these governance constraints, Samsung Electronics is analyzed as more likely to implement shareholder returns through dividends rather than stock retirement.

Theoretically, there is a difference in efficiency between dividends and treasury stock retirement as shareholder return methods. When dividends are received, 15.4% of income tax is withheld, so theoretically, treasury stock retirement is known to be more advantageous for shareholders for the same amount.

Treasury stock retirement is a method of increasing per-share value by reducing the number of shares circulating in the market, which can lead to immediate stock price appreciation, but it also has limitations as it may not be fully reflected in the stock price.

Barclays positively assessed Samsung Electronics' five-year 50% return plan, analyzing it as a scale equivalent to approximately 15% of market capitalization, yet not compromising the company's investment capacity.

Barclays also noted that while dividends are a fixed cash outflow, treasury stock repurchase and retirement offer the advantage of flexible response to market conditions.

Samsung Electronics' special dividend is paid to shareholders as of the record date. From the perspective of enhancing shareholder value, treasury stock retirement, which directly reduces outstanding shares, may have a greater immediate effect on increasing per-share value.

Corporate performance bonuses are primarily calculated based on operating profit, which may not adequately reflect the characteristics of industries like semiconductors that require large-scale capital investment. This can lead to controversy over employee bonus payments.

In contrast, shareholder returns are based on free cash flow (FCF), meaning that if a company increases capital expenditures like facility investments, the funds available for shareholder returns may decrease.

Due to these differences in fund calculation methods, direct linkage between employee bonuses and shareholder return amounts may be difficult.

Nomura Securities positively evaluated SK's large-scale treasury stock repurchase and retirement, proposing a target stock price of 4.7 million won. This is noteworthy as an unusual assessment, considering it was previously a securities firm that held a negative view of the Korean semiconductor market.

Samsung Electronics plans to hold a board meeting this month to approve the shareholder return agenda. The key to this shareholder return announcement is the timing of the policy decision, and specific details are expected to be unveiled within approximately one week.

The Genesis GV90 was unveiled featuring 'coach doors,' a design typically seen in ultra-luxury vehicles such as Rolls-Royce. The wide-opening doors are expected to enhance passenger convenience and offer a distinct level of luxury.

The Genesis GV90 is basically expected to cost over 100 million won. Furthermore, higher trims of the G90 without coach doors already approach 200 million won with added options, so the final price of the GV90 is projected to be even higher.

A revised forecast for electricity demand in the 12th Basic Plan for Long-term Electricity Supply and Demand has been released, with the projected electricity consumption for 2040 significantly raised. The 2040 electricity consumption is now estimated at 847.3 TWh, a 41.7% increase compared to the 11th Basic Plan and a 27.5% increase compared to the 12th preliminary draft released this April.

As electricity plans are established based on future demand, this revision is expected to significantly impact the domestic power industry.

The upward revision of electricity consumption forecasts is expected to lead to a surge in domestic demand for power-related industries such as power equipment, gas turbines, nuclear power plants, and renewable energy. This means a significant increase in investment in equipment and facilities required to expand domestic power infrastructure.

Consequently, power-related companies are expected to see their revenue contribution from the domestic market expand, in addition to overseas markets.

The maximum electricity demand forecast in the baseline scenario of the 12th Basic Plan for Long-term Electricity Supply and Demand has been raised to 158 GW, an increase of 20 GW from the original forecast of 138 GW. 20 GW is an enormous amount of electricity, equivalent to 20 nuclear power plants.

The main reasons for this significant demand increase are cited as the expansion of semiconductor clusters and the construction of AI data centers, which contribute to increased industrial electricity consumption.

To meet the upwardly revised electricity demand forecast, virtually all currently available power sources, including gas, renewable energy, and nuclear power, must be mobilized to their maximum capacity. This means utilizing every possible realistic means to secure electricity.

Discussions about introducing Small Modular Reactors (SMRs) are ongoing, but considering their commercialization timeline and capacity, there are limitations to their contribution to short-term electricity supply.

Therefore, to meet future electricity demand, a balanced utilization of various power sources and maximization of efficiency are inevitable, rather than relying solely on a specific power source.

Oliva Olive Oil Capsules are a product that encapsulates premium olive oils from major Mediterranean countries such as France, Spain, Italy, and Greece into a single capsule. It is an extra virgin oil containing a high concentration of polyphenols, which can contribute to health management.

It can be consumed daily in a convenient capsule form, allowing for easy enjoyment of olive oil without the hassle of measuring or washing dishes.

The Nescafé Genio S coffee machine package, including the machine body, 24 Starbucks capsules, and a signature tumbler, is offered at an unprecedented price of 67,800 won. This allows consumers to enjoy high-quality coffee at a cost of 700-800 won per cup, providing significant cost savings.

This is an attractive package for consumers who want to enjoy a variety of coffees conveniently at home.