SK Hynix (000660) rebounded by over 4% after halting its review of Solidigm’s U.S. stock market listing. Market attention is now shifting toward the third-quarter earnings and additional shareholder return measures to be announced on the 28th of this month. All eyes are on whether the expected return pool of over 30 trillion won will serve as a driving force for a rebound in semiconductor stocks and the KOSPI.

According to the Korea Exchange on the 24th, SK Hynix closed up 4.4% the previous day. Although it started lower in the wake of the plunge in U.S. semiconductor stocks, investor sentiment improved as the company announced before the market opened that it was suspending its review of Solidigm's pre-IPO (pre-IPO investment attraction) and initial public offering (IPO). Samsung Electronics (005930) managed only a 0.5% gain.

On this day, the KOSPI tumbled as low as the 5306 level, down 4.1% in early trading, but closed up 0.3% at the 5550 level, driven by SK Hynix's rebound and institutional bargain hunting. Lee Jae-won, a researcher at Yuanta Securities, analyzed that the easing of concerns over shareholder value dilution caused by double-listing and institutional bargain hunting led the rebound in stock prices and the index.

The Solidigm listing had weighed heavily on SK Hynix's stock price, accompanied by concerns over corporate value discounting and equity dilution, as well as questions raised by political circles and financial authorities. Following Bloomberg's report on the listing push on the 7th of this month (local time), SK Hynix plummeted 30.35% up to the opening price on the 23rd, suffering a steeper drop than Samsung Electronics (-23.28%). As investor backlash grew, the company explained that while there are no changes to Solidigm's growth potential and investment needs, it suspended the listing review after re-evaluating whether it was the most favorable choice for existing shareholders.

The securities industry is paying keen attention to the possibility that this decision will lead to enhanced shareholder returns. Kim Sun-woo, a researcher at Meritz Securities, diagnosed, "It is a clear declaration that enhancing shareholder value is the top priority," forecasting that "the upcoming earnings briefing is highly likely to present enhanced shareholder return measures that exceed previous expectations."

The key lies in the scale and method. SK Hynix's policy is to return 50% or more of its cumulative Free Cash Flow (FCF) for 2025–2027 to shareholders. The 40 trillion won share buyback announced in August was completed on the 21st of this month, earlier than its original scheduled date of November 19. With the previous buyback coming to an end and creating a vacuum in buying demand, detailed follow-up measures have become crucial.

Kim Rok-ho, a researcher at Hana Securities, predicted, "Based on free cash flow, additional shareholder return resources of at least 30 trillion won are expected, and share buybacks and cancellations are likely to be heavily utilized." The market is also focusing on whether large-scale share buybacks and cancellations that directly absorb circulating shares will be included.

The foundation for the additional returns is performance expected to reach record-high levels. According to FnGuide, SK Hynix's third-quarter consensus for consolidated sales and operating profit stands at 98.2257 trillion won and 76.9640 trillion won, respectively. These figures represent year-on-year increases of 301.76% and 576.11%. The company plans to disclose additional shareholder return plans along with its earnings announcement on the 28th of this month.

Samsung Electronics will release its confirmed earnings and business division scorecards the following day, on the 29th. Its previously announced preliminary third-quarter sales stood at 195 trillion won, with an operating profit of 107.4 trillion won. Both companies' earnings outlooks and cash utilization plans are expected to dictate sentiment across the entire semiconductor sector.

Valuation burdens have also eased due to the stock price corrections. Kim Sun-woo noted that as of the closing price on the 22nd, SK Hynix’s 2027 estimated Price-to-Book Ratio (PBR) stood at 1.10x, approaching its historical bottom, and expected shareholder returns based on cash-generating capacity to act as a catalyst for a rebound.

However, a sustained rebound requires improvements in foreign supply and demand. Lee Jae-won pointed out that since the rebound is led by institutions, it is necessary to check whether foreign selling continues. Yang Hyun-kyung, a researcher at iM증권 (iM Securities), also assessed that while the cancellation of the listing mitigates concerns over double-listing, "the possibility that external capital-raising opportunities will shrink and investment capital burdens will increase going forward must also be considered."

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