Hynix announced a repurchase, and storage stocks are becoming more and more like big technology. Today, SK Hynix announced shareholder return measures: 1. A total of KRW 40 trillion in share repurchases, calculated at the closing price of KRW 1.662 million per share on the day before the resolution, equivalent to 24.07 million shares, accounting for approximately 3.3% of the total issued shares (730492365 shares in total). The company plans to complete the repurchase within approximately 3 months from August 20th and fully cancel it after the repurchase is completed; 2. SK Hynix has announced that it will adjust its shareholder return scale from the current "cumulative free cash flow range of 50%" to "above 50%". In terms of return methods, the company will implement share repurchase and cancellation in parallel with cash dividends, and plans to study dividend expansion plans that include fixed dividends and special dividends. The previous shareholder return scale was within 50% of free cash flow This should have set a historical scale for the repurchase of shares by Korean listed companies. 1. Storage stocks are gradually repurchased 1) Hynix is starting to repurchase, and Samsung Electronics is probably not far away. Previously, there were media reports that Samsung was also brewing shareholder return statements. 2) Last week, SanDisk also announced that https://(x.com)/qinbank/status/2087938804179145015? S=46&t=k6rimWSEbo2D2TXolYcM-A In the coming fiscal years, 100% of the remaining cash from capital expenditures will be returned to shareholders. 3) Micron may announce a buyback by the end of the year Currently, due to restrictions imposed by the CHIPS Act, it is not possible to announce large-scale buybacks like Hynix in the short term. Micron signed a CHIPS Act direct funding agreement with the US Department of Commerce on December 9, 2024 (up to approximately $6.1 billion, later expanded to approximately $6.4 billion) for the construction of wafer fabs in Idaho, New York, and other locations. According to the terms of the agreement, CHIPS funds are prohibited from being used for stock repurchases or dividends (as explicitly stated in the law). Micron's agreement allows for limited "Permitted Stock Buybacks": After the second anniversary of the agreement, larger buybacks can be conducted under conditions such as free cash flow, net debt ratio, investment grade rating, and research and development expenses. Micron CFO Mark Murphy made it clear during the June earnings conference call that the company plans to significantly increase capital returns (primarily in the form of stock buybacks) from December 9th, with the long-term goal of returning 100% of excess cash to shareholders. 2. Why are storage stocks starting to generate shareholder returns? 1) The AI wave has changed the quality of cash flow: With the surge in demand for HBM (high bandwidth memory) and enterprise level storage, the storage industry's gross profit and cash flow have significantly increased, giving storage giants the financial confidence to make large shareholder returns. 2) Hedge cyclical fluctuations and manage market expectations The Beta attribute of the storage sector is extremely strong, and the stock price fluctuates violently. By committing to using a fixed proportion of free cash flow (such as 50% of free cash flow) for repurchase and cancellation, companies aim to send a signal to the capital market that there is valuation support at the bottom of the cycle, thereby reducing stock price volatility. 3. Meaning and Impact The core is what we talked about last week, 'The future of storage is like big technology, and may even be similar to Nvidia's trend in the past two years. Storage (especially high-end memory represented by HBM) has the shadow of transitioning from an' extreme cycle commodity 'to an' AI infrastructure growth stock '. ” It will not completely become a pure growth stock, but its cyclical nature will be structurally weakened, and its volatility path, valuation logic, and capital behavior will become increasingly similar to big technologies like Nvidia - there will be a severe pullback, but overall it is supported by demand, the bottom will rise, and capital returns will be more positive. In this situation, the market may give a higher "normalized profit" multiple