Samsung Stock: Buyback Plan Puts Korea’s Preferred Share Discount in Focus

TLDR

• Samsung’s planned buyback of up to 110 trillion won ($81.8 billion) is raising expectations it will target preferred shares trading at a 26% discount to common stock.
• Over 100 South Korean companies, including Hyundai Motor and LG Chem, have preferred shares trading at an average 45% discount.
• A Korean ownership rule limits Samsung’s financial affiliates to holding 10% of voting common stock, making preferred share buybacks a cleaner route.
• Hyundai Motor has already included preferred shares in its August buyback programme, with its common stock trading at a 50%+ premium to preferreds.
• Investors see Samsung’s move as a potential catalyst for a broader re-rating of preferred shares across corporate Korea.

Samsung Electronics is preparing one of the largest shareholder return programmes in history, and investors are already placing their bets on where the money goes.

Samsung Electronics Co., Ltd., SMSD.L

Last month, Samsung announced it could spend up to 110 trillion won ($81.8 billion) on shareholder returns through 2030. The company has not confirmed how much will go toward buybacks, but the market has a strong view on which stock it should target.

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