Samsung Electronics saw its shares rise 3.9% to 281,500 won in Seoul following an announcement of capital returns between 90 and 110 trillion won for 2026, maintaining the framework of 50% of free cash flow for 2024-26. According to a report by Morgan Stanley, the absolute return represents a significant shareholder payout, though it lands slightly below buy-side estimates of over 110 trillion won.
The Capital Allocation Framework and Market Reaction
Samsung maintained its core capital return framework, which allocates roughly 50 percent of its free cash flow (FCF) to shareholders across the period 2024-2026. Early media reports from MoneyToday indicated that the return to shareholders would focus mainly on cash dividends rather than share buybacks.
The 3.9% jump on Friday followed a nearly 10% surge in the preceding session. Market momentum also lifted rival SK Hynix Inc., which climbed 3.6% on Friday after a 12.7% surge in the preceding session, following the announcement of a 40-trillion-won share buyback and cancellation program.
AI-Driven Memory Demand Fuels Record Earnings
The capital return discussions arrive on the heels of financial performance. Last month, Samsung reported a record operating profit for the second quarter, driven by strong demand for memory chips used in artificial intelligence infrastructure. The company has not yet officially commented on the news regarding the new shareholder return program.
The Broader Memory Market Dynamics
- Samsung’s Payout Framework: Targeting 50% of free cash flow through 2026, delivering between 90 and 110 trillion won in total returns.
- SK Hynix Counter-Move: Deploying a 40-trillion-won share buyback and cancellation program.
- The AI Catalyst: Record Q2 operating profits driven by strong demand for memory chips used in artificial intelligence infrastructure.
