Hanmi Pharmaceutical is experiencing a surge in its stock price following the announcement of a stock buyback worth 28.3 billion won. This move is seen as a boost to shareholder return policies, stimulating investor sentiment.
As of 1:27 PM on October 28, Hanmi Pharmaceutical shares were trading at 373,000 won, up 22,500 won (6.42%) from the previous trading day, according to the Korea Exchange.
The increase in stock price is attributed to the company's decision to retire its treasury shares, reflecting expectations for enhanced shareholder value.
On the previous day, Hanmi Pharmaceutical announced in a public disclosure that its board of directors had decided to retire 85,316 common shares. This represents approximately 0.67% of the total issued shares, with the planned retirement amounting to about 28.3 billion won based on book value. The retirement is scheduled for November 2.
Stock buybacks involve a company eliminating its own shares, thereby reducing the number of outstanding shares. This reduction can increase the ownership percentage and per-share value for existing shareholders, making it a common method for returning value to shareholders.
This decision follows Hanmi Group's announcement in March regarding its shareholder return policy. At that time, Hanmi Group revealed plans to retire 70% of the treasury shares held by its listed affiliates, including Hanmi Science and Hanmi Pharmaceutical, while using the remaining 30% for employee performance compensation.
The market has reacted positively to this stock buyback as it aligns with the existing shareholder return plan. Attention is now turning to whether other affiliates will pursue additional shareholder return policies in the future.
* This article has been translated by AI.
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