Companies Strengthening Shareholder-Friendly Policies Including SKIET and Hyosung TNC

Share Buyback Scale in January-February This Year More Than Doubled Compared to Last Year
Dividend Expansion Draws Attention... Hyosung TNC's Dividend per Share Increased 10 Times

[Asia Economy Reporter Hwang Yoon-joo] This year, companies and securities firms are adopting shareholder-friendly policies such as share buybacks, share cancellations, and dividend increases ahead of their regular general meetings of shareholders.

According to the Financial Supervisory Service's electronic disclosure system, on the 18th, No Jae-seok, CEO of SK IE Technology (SKIET), purchased 10,000 treasury shares on the market at 107,626 KRW per share.

SK Securities has also actively implemented share buybacks. At the end of last year, it invested 18.8 billion KRW to buy back 19 million shares. In 2020, it also purchased 28.2 million shares worth a total of 17.9 billion KRW.

Seegene announced on the 4th that it would acquire treasury shares worth 50 billion KRW over three months. Celltrion and Celltrion Healthcare also decided to buy back treasury shares worth 180 billion KRW and 90 billion KRW respectively this year.

According to the Korea Exchange, a total of 74 listed companies engaged in share buybacks from January to February this year, more than double the 35 companies last year. The total buyback amount also increased by 147.7% compared to the same period last year, reaching 1.3555 trillion KRW from 547.2 billion KRW.

Generally, share buybacks by companies and management are interpreted as positive news. This is because the reduction in the number of shares in circulation leads to an increase in earnings per share (EPS) and other effects. It can also be read as a signal that the current stock price is undervalued.

Another notable point is the expansion of dividends.

Hyosung TNC is a representative example. Earlier, Hyosung TNC announced that it decided on a dividend of 50,000 KRW per common share, which is a tenfold increase compared to 5,000 KRW in 2020. Hyosung Advanced Materials also attracted attention by setting a dividend of 10,000 KRW last year when it initiated dividends for the first time.

POSCO Holdings held its regular general meeting of shareholders yesterday and decided on an annual dividend of 17,000 KRW per share (payout ratio 19%). This is more than double the 8,000 KRW from the previous year. However, it falls far short of the 30% payout ratio promised by Chairman Choi Jeong-woo of the POSCO Group in a shareholder letter last January.

SK Securities announced dividends of only 15 KRW per common share and 20 KRW per preferred share, but considering that it had not paid dividends since 2011, this is regarded as meaningful.