Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), in an event on Wednesday, announced plans to double its dividend, put more money in acquisitions and to list its stock in the United States through American depository schemes, however, some of the shareholders did not find the deals lucrative enough.
Samsung offering goodies to investors
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) promised the goodies to shareholders in a bid to re-strengthen its share prices, which dropped this summer on expectations that Samsung will see a decline in its profits through its smartphone business.
The Delbrook Resources Opportunities Master Fund was up 9.2% for May, bringing its year-to-date return to 33%. Q1 2021 hedge fund letters, conferences and more Dellbrook is an equity long/ short fund that focuses exclusively on the metals and mining sector. It invests mainly in public companies focused on precious, base, energy and industrial metals Read More
The share price “does not fully reflect our profit growth and our leadership position in the I.T. industry,” said Lee Sang-Hoon, the company’s chief financial officer. The executive added that in the future greater stress will be given towards direct shareholder returns along with maintaining strategic growth of the company.
Investors not very impressed
However, the plethora of announcements could not bury the talk that Samsung was ungenerous and held approximately $50 billion in cash. On Wednesday, Samsung held an analyst day for only the second time in its history and executives like Mr. Lee spoke at the event. The share price of Samsung declined 2.3% towards the end of the trading session.
Executives at Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) said that they will pursue a strategy that will ensure that Samsung holds one-third of the total share of the global smartphone business, which is over two times the share garnered by arch rival Apple Inc. (NASDAQ:AAPL).
Diverse portfolio Samsung’s greatest strength
According to Samsung executives, the strength of the Korean firm lies in its diversified portfolio, in which it makes products ranging from smartphones and televisions to washing machines and the ancillaries that are used to run these devices. They added that unlike Apple and many other device makers who depend upon outsourcing, Samsung relies on its in-house capabilities to achieve its goals.
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) is a massive company and when compared to other similar size enterprises, the Korean device maker has primarily depended upon internal sources of growth rather than striking deals with other companies. However, Samsung is gearing up for mergers and acquisitions, which Mr. Lee quoted as a paradigm shift in the information technology business, where increased emphasis is laid on software rather than on hardware.
More details needed
Samsung is apparently looking forward to launching its 3D NAND (V-NAND) technology, reflecting that approximately half of total bits shipped for SSD for enterprise will be based on V-NAND, and it expects a 105% CAGR in V-NAND enterprise bit shipments through 2017. Also, the company is looking forward to cutting down its SSDs based on its VNAND multi-bit solutions price by half, says a report from BMO Capital Markets analysts (Tim Long, Ambrish Srivastava, Ari Klein, Gabriel Ho) who attended the event in Seoul.
According to analysts, though, while Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) talked about maintaining its leading position in smartphones and becoming the market leader in tablets, “We were disappointed not to hear more specifics on how these goals will be accomplished or hard numbers we should be expecting in the near term.”