Samsung Electronics posted its best-ever quarterly earnings — surpassing 100 trillion won ($74.7 billion) — yet its share price still fell, turning market attention toward SK hynix's third-quarter results due Oct. 27.
SK hynix is also expected to report record quarterly earnings, with analysts forecasting operating profit of around 75 trillion won for the period. The question now is whether a strong earnings print and shareholder-return policy will be enough to push its share price higher.
Samsung Electronics on Thursday announced preliminary third-quarter consolidated sales of 195 trillion won and operating profit of 107.4 trillion won — surging 126.6 percent and 782.5 percent, respectively, from the same period a year earlier.
It marked the first time a domestic company has crossed the 100 trillion won operating profit threshold in a single quarter — a record with no precedent even among global technology giants such as Apple and Nvidia. The operating margin hit 55.1 percent, a historic high rarely seen in manufacturing.
Despite the blowout numbers, Samsung's share price closed down 2.42 percent at 262,000 won on Thursday, weighed down by high market expectations and concerns about a potential industry slowdown. The sell-on-news effect spilled over to SK hynix, which also ended the session down 2.44 percent at 1.681 million won.
Investor attention is now shifting to SK hynix, which is set to release its third-quarter results Oct. 27. Analysts expect the company to deliver record quarterly operating profit of around 75 trillion won, driven by rising memory chip prices.
Eugene Investment & Securities estimates SK hynix's third-quarter sales at 97.83 trillion won and operating profit at 75.69 trillion won, projecting an operating margin of 77.4 percent.
Even accounting for recent exchange-rate adjustments stemming from won strength, analysts say robust memory price gains should more than offset the currency headwind and support strong results. The share price outlook, however, remains uncertain.
"Memory market conditions remain stronger than the market expects, but it will likely take time to close the gap between market perception and actual industry fundamentals," said Son In-jun, an analyst at Eugene Investment & Securities. "Concerns about slowing price growth being read as a cycle peak, along with recurring worries about supply increases in 2028 and AI demand destruction, mean the share price is likely to rise only gradually relative to earnings."
Son added that "quarterly earnings confirmation, the outcome of next year's HBM price negotiations, and an expansion of shareholder returns based on free cash flow will progressively narrow that gap, and the share price should be able to sustain a gradual upward trend." Eugene Investment & Securities maintained a strong buy rating on SK hynix with a target price of 3.7 million won.
IBK Investment & Securities also projected SK hynix's third-quarter sales at 95.81 trillion won and operating profit at 75.1 trillion won, implying an operating margin of 78.4 percent, and kept a buy rating with a target price of 4 million won.
"Demand for memory chips continues to grow on the back of expanding AI models, while supply growth remains limited — a situation that is likely to persist for a considerable period," said Kim Un-ho, an analyst at IBK Investment & Securities. "The current share price is excessively undervalued."
Analysts also expect SK hynix's large-scale shareholder-return program to act as a stabilizing force for the stock. The company unveiled a new shareholder-return policy on Aug. 19, under which it will allocate more than 50 percent of free cash flow — after capital expenditure — to shareholder returns.
"We estimate the figure will be at least 90 trillion won on a 2026 basis," Kim said. "The company plans to center its shareholder returns on buybacks, and we expect additional buybacks to be carried out in the fourth quarter on top of the 40 trillion won already being executed. Dividends will also be paid in part, but buybacks will remain the primary vehicle."
jiyun@heraldcorp.com
