In the collapse of 50,000 electrons… Samsung Electronics boosts stock price – Maeil Business Newspaper

This is largely due to the fact that the U.S. government’s policy of restricting the export of cutting-edge semiconductors to China has put a cloud over the operation of Chinese business sites, and that artificial intelligence (AI) semiconductor technology such as high bandwidth memory (HBM) has been evaluated as lagging behind competitors. Samsung Electronics’ stock price closed at 49,900 won the previous day, falling below the 50,000 won mark for the first time in about 4 years and 5 months since June 15, 2020 (closing price 49,900 won).

Accordingly, Samsung Electronics invested 10 trillion won to improve shareholder value. According to the report for the third quarter of 2024, current assets held by Samsung Electronics are 219.2351 trillion won. Among these, cash and cash equivalents amount to KRW 43.1313 trillion, and short-term financial products such as time deposits and money market funds amount to KRW 60.6165 trillion. In fact, cash assets amount to 103.7478 trillion won, which is a tenth of the funds, and a strong message was sent to the market that the company will urgently put out the fire by urgently injecting funds.

This is the third time that Samsung Electronics has purchased and canceled treasury stocks worth around 10 trillion won, following 2015 (11.3 trillion won) and 2017 (9.3 trillion won). From 2015 to 2017, the company massively boosted its stock price by paying more than 10 trillion won in dividends and buying and canceling more than 20 trillion won of treasury stock over three years.

As Samsung Electronics’ valuation fell to a historic low, voices calling for a boost in stock price and buyback of shares have also increased. According to Shinhan Investment & Securities, Samsung Electronics’ price-to-book ratio (PBR) was 0.8 times as of the 14th, a historic low.

Samsung Electronics’ lowest annual PBR rose to 1.6 times in 2021, when expectations for the memory industry were high, and rarely fell below 1 times. Even at a time when Samsung Electronics needed enormous funds for research and development (R&D) and facility investment, the reason for its large-scale shareholder return was such extreme undervaluation of its stock price.

Meanwhile, Samsung Electronics’ stock price closed at 53,500 won on the 15th, up 7.21%. On this day, Samsung Electronics preferred stock also rose 6.87%. Samsung Electronics’ such rise is the first since March 24, 2020 (up 10.47%), when a strong technical rebound occurred following a plunge during the COVID-19 pandemic.

On this day, Samsung Electronics’ upward trend was led by foreign investors. The net purchase amount by foreigners was 235.1 billion won, the largest amount since 519 billion won on August 16.

Considering that 470 billion won was purchased the previous day alone, the purchase size was not that large, but it is significant that the selling trend has stopped. Accordingly, institutional investors also made net purchases of 53.1 billion won.

Samsung Electronics’ trading volume on this day was 2.3 trillion won, maintaining a similar high level as the previous trading day. Jeong In-ji, a researcher at Yuanta Securities, said, “The fact that trading volume has more than doubled compared to usual means that there are many differing opinions on the stock price in the market. Even after trading volume increased on August 5, Black Monday, Samsung Electronics’ stock price showed a short-term rebound.” Foreigners who continued to sell Samsung Electronics’ main stock also made a net purchase of 43 billion won worth of Samsung Electronics preferred stock on the 14th, highlighting the attractiveness of the 3% annual dividend (based on preferred stock).

[김제림 기자 / 이상덕 기자]

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