Companies take pre-emptive measures before the government announces an increase in corporate value Major companies such as distribution, IT, and telecommunications are pushing to strengthen shareholder returns. Hyundai, even related, is taking steps to raise dividends and cancel stocks’ r treasury.
Domestic companies are strengthening shareholder return policies in line with government policy to resolve the phenomenon of ‘undervaluation of the Korean stock market (Korean discount)’. As the government is about to announce a corporate value up programme, it is pre-emptively pushing for more dividends and canceling treasury stocks.
According to the industry on the 21st, all 10 listed companies in the group, including Hyundai GF Holdings, the holding company of Hyundai Department Store Group, held a board meeting and established a medium to long-term dividend policy (this year to 2026). . Hyundai Department Store raised the minimum dividend from 1,000 won to 1,300 won, and Hyundai Home Shopping decided to guarantee a dividend of more than 2,500 won per share. In the case of Hyundai holding company GF Holdings, it set the minimum dividend amount at 150 won per share and announced that last year’s dividend would be 200 won per share. Hyundai Green Food also decided to pay dividends of at least 325 earned per share for the next three years. Five affiliates, including Handsome, Hyundai Livart, Hyundai Easywell, Daewon Kangup, and Hyundai Everdigm, which did not pay dividends, also participated in the expansion of shareholder returns. For the first time, it announced a plan to maintain the minimum dividend payout ratio in the 10-20% range for three years.
Hyundai Department Store Group also plans to cancel its own shares worth a total of 25 billion won this year. Handsome plans to buy additional treasury stocks and then cancel 5% (about KRW 12.4 billion) of the total number of stocks issued, including current holdings, at the end of this month. Zinus plans to cancel 475,944 treasury shares worth a total of 3.5 billion won by April.
The industry assessed that Hyundai Department Store Group is conducting a ‘comeback’ to expand shareholder returns at a time when the domestic distribution industry is generally experiencing poor performance due to the economic downturn. In particular, even affiliates that have not paid off are said to be putting a lot of effort into improving shareholder value.
Domestic IT companies are also strengthening shareholder returns. In the case of NHN, for the first time since its establishment, it announced that it would return a total of 66.6 billion earned to shareholders through cash dividends and share buybacks and cancellations. The dividend per share is 500 won, and the total dividend is about 16.9 billion won. Payment is scheduled for April following approval at next month’s regular general meeting of shareholders.
It plans to invest about 20 billion won to buy about 790,000 shares of its own and cancel 1.17 million shares, or 3.4% of the total issued shares, on the 26th. The amount of treasury stock cancellation is expected to be around 26.3 billion won.
SK Networks also decided to increase dividends and manage treasury stock to improve shareholder value. It was decided to increase the regular dividend, previously 120 per ordinary share (145 earned for the preferred stocks), to 200 earned (225 earned for the preferred stocks), and 14,503,63 of shares of treasury stock (about 77 billion won), which corresponds to 6.1% of all stocks, at the beginning of next month Burning will take place.
KT planned to burn 27.1 billion worth of treasury stock. Following the cancellation of 100 billion worth of treasury stocks earned for the first time in 14 years early last year, large-scale treasury stock cancellations will be done again this year. In addition, in accordance with the shareholder return policy announced in October last year, the dividend per share was set at 1,960 won. The market dividend rate is around 5.5%.
Kim Min-beom, Donga.com reporter mbkim@donga.com
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