SK hynix eyes near-80% margin as investors await bigger payouts

SEOUL, October 26 (AJP) - SK hynix, South Korea’s leading supplier of memory crucial to artificial intelligence chips, is widely expected to deliver another earnings milestone this week with quarterly operating profit of about 77 trillion won ($58 billion) and a margin approaching 80 percent. 

The FnGuide consensus puts operating profit at about 77 trillion won on revenue of roughly 98 trillion won, translating into a staggering operating margin of about 79 percent for the quarter ended September.  

The profit forecast is about 27 percent above the previous quarterly record of 60.5 trillion won in April–June, 61 percent from 37.6 trillion won in the first quarter, with the operating margin reaching 76 percent.

SK hynix releases its third-quarter results Wednesday.  Its shares were trading 1.6 percent higher at 1,297,000 won early Monday, recovering from an intraday low of 1,190,000 won on Oct. 20 amid doubts over the sustainability of AI spending, but more than 56 percent below the June 22 intraday peak of 2,987,000 won.
  Investors are also watching for additional shareholder returns, including a possible distribution of gains from the company’s stake in Japanese NAND flash memory maker Kioxia.

SK hynix is considering paying out some of those gains in installments and may make the announcement during earnings call Wednesday.

The company invested 395 billion yen in 2018 as part of a Bain Capital-led consortium that acquired Toshiba’s memory business, now Kioxia, for 2 trillion yen.

It recovered about 4.12 trillion won from partial disposals in the first quarter. Given the Japanese chipmaker's second-quarter gains at around 20 trillion won, this year’s dividends could substantially exceed last year’s total of 2.1 trillion won.

The potential payout would follow a 40 trillion won share buyback announced in August. Purchases were completed on Oct. 21, about a month ahead of the original Nov. 19 deadline, with the acquired shares earmarked for cancellation.

SK hynix also strengthened its shareholder-return framework in August, targeting more than 50 percent of cumulative free cash flow for 2025–2027 through dividends, buybacks and share cancellations. That replaced its previous policy of returning up to 50 percent.

Samsung Electronics will follow with its detailed third-quarter results Thursday, including a breakdown across its semiconductor, smartphone and home-appliance businesses.

Samsung projected operating profit of 107.4 trillion won on revenue of 195 trillion won in preliminary guidance released Oct. 8. Its shares were down 0.7 percent at 214,000 won early Monday.

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