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DS Investment Securities: Samsung Electronics' Share Buyback Capped at 10-20 Trillion Won Due to Financial Regulations
Electronic Technology · Semiconductors · yonhap_finance · 2026-08-23
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DS Investment Securities estimates that Samsung Electronics' share buyback capacity is limited to 10-20 trillion won due to the Financial Industry Restructuring Act, shifting the focus of its massive shareholder return plan toward dividends.
What Happened
Share Buyback Constraints: DS Investment Securities estimates that Samsung Electronics' share buyback capacity within its 90-110 trillion won shareholder return plan is limited to 10-20 trillion won. This restriction stems from the Financial Industry Restructuring Act, as further cancellation of common shares would push the holdings of Samsung Life Insurance and Samsung Fire & Marine Insurance above the 10% legal limit.
Shift Toward Dividends: Research Center Head Kim Soo-hyun suggests that because of these regulatory hurdles, a significant portion of the remaining 70 trillion won in shareholder returns will likely be distributed as dividends. This is in addition to the 30 trillion won in regular dividends already scheduled for the third quarter.
Preference for Preferred Shares: Analysts note that Samsung may prioritize buying back and canceling preferred shares, which are non-voting and thus excluded from the ownership calculations under the Financial Industry Restructuring Act. Furthermore, the current high price gap between common and preferred shares provides a strong incentive for the company to favor preferred stock buybacks.
Impact on Samsung C&T: The massive dividend payout will flow to Samsung C&T, which is expected to redistribute up to 70% of these funds to its own shareholders. Projections indicate that the dividend income received by Samsung C&T from Samsung Electronics will rise significantly, peaking around 2027.