KOSPI and KOSDAQ listed companies are increasingly announcing stock buyback plans worth tens to hundreds of millions of won. While these moves aim to enhance shareholder value, some firms are falling short of their initial buyback targets. Legal reforms and rising interest rates are cited as factors increasing the burden of stock repurchases.
According to the Financial Supervisory Service's electronic disclosure system (DART), Youngone Corporation announced on October 6 a plan to buy back 50 billion won worth of its own shares to enhance shareholder value. Earlier, Cheil Worldwide also disclosed a plan on September 30 to acquire and retire 40 billion won worth of its own shares to boost shareholder value.
Stock buybacks are active not only in the securities market but also in KOSDAQ. Cosmetic manufacturer Witch's Pouch announced on October 2 that it would enter into a trust agreement with NH Investment & Securities for a 5 billion won stock buyback. Metal fittings manufacturer Seongkwang Bend also announced a 5 billion won buyback plan last month.
Overall, the securities market is witnessing a trend of stock buybacks. In the past month, 18 companies listed on the KOSPI announced a total of 568.5 billion won in stock buyback decisions. KOSDAQ-listed companies also decided to acquire a total of 105 billion won worth of their own shares last month.
Companies are pursuing stock buybacks to enhance shareholder value. By repurchasing and retiring shares, the number of outstanding shares decreases, which can lead to an increase in earnings per share (EPS) based on the same profit. Stock buybacks and retirements signal an expansion of shareholder returns, potentially alleviating factors that contribute to undervaluation of the company.
However, there are concerns in the market about companies not meeting their announced buyback amounts. The legal reforms have increased the burden of holding and retiring treasury shares, and the current phase of rising interest rates is also raising the financial management burden for companies.
Indeed, there are cases where actual buyback amounts have fallen short of initial plans. Retailer Save Zone I&C reported that it acquired 640.74 million won worth of its own shares through a trust agreement that expired in March, achieving a compliance rate of 64.07%. The company cited unfulfilled orders due to market fluctuations and obligations arising from legal reforms as reasons for the shortfall.
In KOSDAQ, there have also been instances of large-scale buyback plans falling short. Medical supplies manufacturer T&L reported in a trust contract termination report submitted on September 23 that it acquired 721.54 million won worth of its own shares through a 10 billion won trust agreement, achieving a compliance rate of 72.15%, leaving about 2.8 billion won unspent by the contract's expiration.
According to the Financial Supervisory Service's electronic disclosure system (DART), Youngone Corporation announced on October 6 a plan to buy back 50 billion won worth of its own shares to enhance shareholder value. Earlier, Cheil Worldwide also disclosed a plan on September 30 to acquire and retire 40 billion won worth of its own shares to boost shareholder value.
Stock buybacks are active not only in the securities market but also in KOSDAQ. Cosmetic manufacturer Witch's Pouch announced on October 2 that it would enter into a trust agreement with NH Investment & Securities for a 5 billion won stock buyback. Metal fittings manufacturer Seongkwang Bend also announced a 5 billion won buyback plan last month.
Overall, the securities market is witnessing a trend of stock buybacks. In the past month, 18 companies listed on the KOSPI announced a total of 568.5 billion won in stock buyback decisions. KOSDAQ-listed companies also decided to acquire a total of 105 billion won worth of their own shares last month.
Companies are pursuing stock buybacks to enhance shareholder value. By repurchasing and retiring shares, the number of outstanding shares decreases, which can lead to an increase in earnings per share (EPS) based on the same profit. Stock buybacks and retirements signal an expansion of shareholder returns, potentially alleviating factors that contribute to undervaluation of the company.
However, there are concerns in the market about companies not meeting their announced buyback amounts. The legal reforms have increased the burden of holding and retiring treasury shares, and the current phase of rising interest rates is also raising the financial management burden for companies.
Indeed, there are cases where actual buyback amounts have fallen short of initial plans. Retailer Save Zone I&C reported that it acquired 640.74 million won worth of its own shares through a trust agreement that expired in March, achieving a compliance rate of 64.07%. The company cited unfulfilled orders due to market fluctuations and obligations arising from legal reforms as reasons for the shortfall.
In KOSDAQ, there have also been instances of large-scale buyback plans falling short. Medical supplies manufacturer T&L reported in a trust contract termination report submitted on September 23 that it acquired 721.54 million won worth of its own shares through a 10 billion won trust agreement, achieving a compliance rate of 72.15%, leaving about 2.8 billion won unspent by the contract's expiration.
* This article has been translated by AI.
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