Analysis-Samsung, SK Hynix payouts test South Korea's reform drive as investors seek more
Samsung and SK Hynix have announced significant shareholder return plans, but investors remain skeptical about the broader impact on South Korea's market valuation. Despite the AI-driven cash windfall, the 'Korea discount' persists due to ongoing concerns regarding corporate governance and capital allocation.
Why it matters
The success of these payouts is a critical test for the South Korean government's 'Value-Up' program aimed at aligning local stock valuations with global standards.
SINGAPORE/SEOUL, Sept 10 (Reuters) - Eye-popping shareholder-return plans from Samsung Electronics and SK Hynix have become an early test of South Korea's corporate reform drive, with investors welcoming the windfall but saying more is needed to narrow the country's decades-old valuation gap.
An AI-driven boom has left South Korea's two largest companies flush with cash, fuelling investor demands for larger payouts.
Yet the plans, worth more than 130 trillion won ($97 billion) combined for this year alone, have not fully satisfied investors. South Korea's benchmark KOSPI, in which the two chipmakers account for nearly half of the index's weighting, remains about 26% below the record high reached in June.
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