Samsung Electronics “ Stock Repurchase of KRW 1 Trillion”

Samsung Electronics held an extraordinary board of directors on August 2, and then decided to purchase treasury stocks of KRW 1 trillion.

At the beginning, Samsung Electronics planed to repurchase its stocks of KRW 1 trillion, and so purchased treasury stocks of KRW 549.1 billion for one month in April. However, Samsung Electronics decided to purchase the treasury stocks for KRW 1 trillion, twice the remaining stocks additionally.

Accordingly, Samsung Electronics will purchase 1.7% of total stocks issued (on the basis of the latest one-month average stock price) from August 6 to November 25. There are common stocks of 2,660,000 shares and preferred stocks of 400,000 shares. When the additional purchase is completed, Treasury stocks of Samsung Electronics will increase to 6.95% from 5.08% of the total stocks.

Ju Wu-Sik, IR team leader of Samsung Electronics, said “We decided to purchase additional treasury stocks, as the current stock price is underestimated compared with the actual intrinsic value, and the good business results are obtained such as the increased profits of the first half of the year. This decision is made through collecting the opinion by Institutional investors”

Industries said that Samsung Electronics expressed a strong confidence in achieving the good results for the second half of the year despite uncertain world IT business. If other companies of the good business results purchase the treasury stocks, it is anticipated that it will have the good influence on the stock market.

Jeong Chang-Won, the analyst of Daewoo Securities forecasted, “Owing to the purchase of treasury stocks, the strong increase of the stock price cannot be expected. The support line of KRW 300,000 per share can be maintained as it differentiates from other international IT companies.”

ysshin@donga.com