SK hynix ahead of earnings on 28: profit forecasts rise | Park Se-ik, Chesley Investment Advisory [Womae Shinbak / 26.10.23.Fri]
- What to look for
- Connect Solidigm’s external financing with SK hynix shareholder returns to examine how cash is allocated between investment and share repurchases.
- Why it matters
- Separate the risks removed by stopping an IPO review from the financing needs that remain, and calculate share-count effects separately from changes in profit and cash.
Timeline
5 segmentsThe company’s official statement confirms that Solidigm discontinued pre-IPO and IPO reviews while growth investment and alternative financing remain under consideration. The presenter’s speculation about government pressure and a single cause for an intraday rebound is separated from confirmed facts, as are a repurchase plan, actual purchases and completed cancellation. Ambiguous earnings forecasts and investor-loss figures that were not checked against primary records are not repeated as established amounts.
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Does the same buyback budget always raise earnings per share?
Assume a hypothetical company, not actual company data, with 100 shares, annual profit of 100 and a repurchase budget of 100. A price of 10 buys 10 shares, while a price of 5 buys 20 shares. If all purchases and cancellations finish at the start of the year and other conditions are equal, the annual share counts become 90 and 80. With profit unchanged at 100, earnings per share rise from 1 to about 1.11 or 1.25. But if profit falls to 80 after reducing shares by 10, 80/90 is about 0.89, below the original level. The arithmetic of buying more shares at a lower price is separate from concluding that earnings, cash and investment capacity improve.
Check for yourself
- Were planned spending and completed repurchase and cancellation quantities distinguished?
- Were forgone interest income on cash or additional borrowing costs considered?
- How will necessary capital investment be funded after external financing plans stop?
Limits of application
The share count and monetary units are hypothetical, with all purchases and cancellations assumed complete at the start of the year to simplify time weighting. Fees, taxes, debt, interest on cash, stock compensation and new issuance are excluded. Actual earnings per share require the time-weighted share count and the relevant profit definition; this is not a forecast of SK hynix earnings per share, fair value or returns.