- Team Leader
- Public-data Case Study
Samsung ElectronicsCapital Allocation Case Study
Assessing a KRW 63 trillion capital-allocation proposal through valuation and corporate governance.
Independent university team project for the Business Finance course at Korea University, based on public disclosures. Not commissioned by or affiliated with the subject company.
The decision was how to deploy shareholder-return resources: buy back and cancel preferred shares or distribute the money as dividends.
As team leader, I took the six of us through Samsung's public 2026 half-year filing on DART and Korea Exchange prices on 30 June 2026. We assessed Life Asset Management's proposal to use about KRW 63 trillion of remaining shareholder-return resources for preferred-share buybacks and cancellation. Our analysis favoured that approach in Samsung's circumstances, based on the preferred-share discount and the governance implications of cancelling voting shares. The report sets out the valuation, ownership analysis and reasoning behind our recommendation.
- KRW 579tn
- Book equity at 30 June 2026 (assets 759.48tn, liabilities 180.17tn)
- KRW 1,953tn
- Market capitalisation the same day: KRW 334,000 × 5.85bn common shares
- 26.7%
- Preferred-share discount. One common share's price buys about 1.36 preferreds.
- ≈10%
- Of common shares held by Samsung Life and Samsung Fire & Marine
Source: team report, p.2, from Samsung Electronics' 2026 half-year filing (DART).
Book value against market value
We checked the accounting equation against the real filing first, and it closed to the won. The market told a different story. On the same day it priced Samsung's common shares at more than three times the book equity, and we read the difference as technology, brand and expectations for the semiconductor cycle, the kind of value a balance sheet never records.
3.37×market value over book equity, a gap of KRW 1,373tn
Why preferred shares
At first the proposal looked like an ordinary buyback argument. The share class is what made it interesting, because preferred shares were trading well below common shares and the same money could therefore cancel more of them.
Ownership pointed the same way. Samsung Life and Samsung Fire & Marine hold roughly 10% of the common stock, so cancelling common shares would push their stake up, whereas preferred shares carry no votes at all.
Where we landed
We did not claim that cancelling preferred shares always beats a dividend. In Samsung's position, with a deep preferred discount and an ownership structure that makes cancelling common shares awkward, we judged it the more effective use of the money.
Source: team report, p.3, assessment of Life Asset Management's proposal.
One more question we chased
Foreign investors held 49 to 53% of Samsung's common shares at each year-end from 2021 to 2025, and about 46% by the end of Q2 2026. We went to the Commercial Act and the Corporate Income Tax Act to show why that doesn't make Samsung a foreign company, since incorporation, place of effective management and tax scope all point to Korea.
Warren Buffett said that price is what you pay and value is what you get. This project found the gap between them twice, once in a KRW 1,373 trillion difference and again in a share class the market was selling 26.7% cheaper.
My role
Team Leader of Business Finance Team 4. I led the analysis from the balance sheet through to the team's recommendation on the preferred-share proposal.
Skills used
Financial statement analysis, Capital allocation, Corporate governance, Team leadership