Samsung Electronics (KRX:005930, LSE:BC94) Samsung Electronics (KRX:005930, LSE:BC94 shares rose over 9% as investors welcomed expectations of a shareholder-return programme exceeding 100 trillion won, or about $72 billion.
The knock-on impact was to help South Korea’s benchmark Kospi rebound 6.1% after the previous session’s sharp sell-off in technology stocks.
Samsung's London-listed global depositary receipts rose 5.88%.
A MoneyToday report said the South Korean technology company is planning this as record chip profits strengthen its capacity to reward investors.
The programme is expected to include a special dividend and will be considered at a board meeting scheduled for the end of August.
Samsung plans to allocate 50% of its free cash flow to shareholder returns under the new programme, extending a policy that has made cash distributions a larger part of its capital allocation.
The move would represent a significant increase from Samsung’s existing policy for 2024 to 2026, which commits the company to returning 50% of free cash flow and paying an annual regular dividend of 9.8 trillion won.
Samsung has already signalled that it could make additional distributions in 2026 if 50% of free cash flow for the three-year period exceeds the value of dividends and other shareholder returns made during the period.
The potential payout comes as Samsung benefits from strong demand for artificial intelligence chips, with the company investing heavily to expand its semiconductor capabilities while seeking to improve returns to shareholders.
The plan follows rival SK Hynix’s announcement of a 40 trillion won share buyback and cancellation programme, the largest such shareholder return announced by a South Korean listed company.
Samsung has yet to comment on the reported new programme.
