SK hynix (000660.KS) shares were up more than 6% from their regular-session close in after-hours trading between 3:40 p.m. and 8 p.m., as buying interest picked up following the company's announcement of a 40 trillion won ($28 billion) share buyback-and-cancellation program.
According to Nextrade, SK hynix shares were trading at 1,626,000 won in after-hours trading on the 19th, down 36,000 won, or 2.17%, from the previous session. The stock had closed the regular session at 1.5 million won, down 9.75%, and appears to be recovering those losses.
The improvement in investor sentiment is attributed to SK hynix's disclosure that it will carry out the acquisition and cancellation of 40 trillion won worth of treasury stock. Shortly after the market closed, the company said in a regulatory filing that it had decided to acquire 24.07 million common treasury shares through open-market purchases. The purchase amount is 40.0434 trillion won. SK hynix said the purpose of the acquisition was "to enhance shareholder value through the cancellation of treasury shares."
SK hynix also unveiled a shareholder return policy for the next three years. The company said it would return more than 50% of the cumulative free cash flow (FCF) generated over the next three years. To enhance shareholder value, it plans to combine treasury share acquisition and cancellation with cash dividends, while also reviewing measures to expand payouts, including its existing fixed and special dividends.
"The specific scale and method of additional returns, including dividends and share buybacks, will be announced at the time of the third-quarter earnings release after a board resolution," an SK hynix official said.
