Hyundai Motor Announces Mid- to Long-Term Shareholder-Friendly Policy
Active Moves Exceeding Market Expectations
"Investing 120.5 Trillion KRW Over 10 Years to Achieve 10% Operating Profit Margin"
Jang Jae-hoon, President and CEO of Hyundai Motor Company, is holding the 2024 CEO Investor Day on the 28th at a hotel in Yeouido, Yeongdeungpo-gu, Seoul.
Hyundai Motor Company has announced a strong shareholder return policy. It plans to carry out share buybacks and cancellations worth 4 trillion KRW over the next three years, a practice rarely done by domestic companies, and to pay a minimum dividend of 10,000 KRW per share, increasing the total shareholder return ratio by nearly 1.4 times.
On the 28th, Hyundai Motor held the '2024 CEO Investor Day' event at a hotel in Yeouido, Yeongdeungpo-gu, Seoul, targeting Yeouido investors, analysts, and credit rating agency officials, where it announced the 'Corporate Value Enhancement Plan' with these details.
Hyundai Motor announced that from next year until 2027, it aims to achieve a total shareholder return (TSR) of 35% through dividends and share buybacks and cancellations over three years. This target exceeds the previously announced long-term shareholder return policy of 26% (dividend payout ratio 25% + share buybacks and cancellations 1%) by about 10 percentage points. It also surpasses the initial estimates by securities firms of 31-33% (dividend payout ratio 25% + share buybacks and cancellations 6-8%).
Specifically, the current quarterly dividend per share will increase from 2,000 KRW to 2,500 KRW, with an annual dividend set at a minimum of 10,000 KRW. Additionally, Hyundai plans to repurchase and cancel shares worth a total of 4 trillion KRW over three years. When shares are repurchased and canceled, the total number of shares decreases, thereby increasing the value per share, such as earnings per share (EPS). This typically leads to a corresponding rise in stock price. This is a representative shareholder return method used by major U.S. companies. In Korea, except for some financial companies like Meritz Financial Group, companies rarely cancel shares after repurchasing them.
Jang Jae-hoon, CEO of Hyundai Motor, said, "This is not a one-time shareholder return but a continuous increase in shareholder returns based on improving return on equity (ROE) and the TSR 35% target."
To this end, Hyundai announced it aims to achieve an average ROE of 11-12% over three years. It also outlined a mid-to-long-term financial strategy to invest a total of 120.5 trillion KRW over 10 years from 2024 to 2033 and achieve an operating profit margin of 10% by 2030.
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