Yesterday, Hynix changed its stance from reducing up to 50% of FCF to reducing at least 50%. Some people said, 'Micron is returning 100% to shareholders, but domestic companies are doing that?'
However, you shouldn't just look at the numbers 50% and 100%. The calculation methods used by the two companies as a basis for reduction are different.
Simply put, Hynix uses FCF, which we know as 'operating cash flow - capital expenditure', but Micron uses Adjusted FCF (excess cash?) according to its presentation materials.
For example, let's say the two companies recorded the following cash flows.
In the case of Hynix, since it is a reduction of at least 50% of FCF, the amount to be reduced is 'FCF 10 trillion won * 50% or more, that is, 5 trillion won or more'.
Micron assumes that it will retain 4 trillion won for future financial stability under the same conditions.
Then, excess cash becomes '(FCF 10 trillion won - retained cash 4 trillion won) 6 trillion won'. If you increase the retained cash, the amount of shareholder return will decrease accordingly. In the latter case, even if it is said to be a 100% return, the return amount will be smaller than Hynix.
Therefore, at this point, it is unknown whether Hynix's 50% high or Micron's 100% is a more shareholder-friendly announcement.
