CEOs of Samsung, LG group companies buying back their stocks

Leading executives of major South Korean corporations Samsung Electronics Co., LG Energy Solution Ltd. and LG Electronics Inc. are buying back their respective companies' stocks in a move interpreted by the market as expressing their intent to conduct "responsible management."

Analysts say the buybacks also show the executives' confidence in achieving mid- to long-term growth ahead of the announcement of first-quarter results.

Data Analysis, Retrieval and Transfer, aka DART, the electronic disclosure system of the Financial Supervisory Service, on Thursday said Kyung Kye-hyun, president and CEO of Samsung Electronics' Device Solutions (DS) Division who oversees his company's semiconductor business, bought 3,000 of his company's shares on March 22 at 60,700 won ($46.8) each.

The company on April 7 will release its preliminary first-quarter results. Though earnings by unit are not disclosed, the DS Division is believed to have suffered an operating loss of nearly 4 trillion won in the quarter. Given its head's buyback of his company’s stock, analysts are calling the move “an expression of confidence in mid- to long-term management performance.”

The division's first-quarter operating loss is deemed tolerable because it is based on the strategic decision of "no artificial production cuts." A source from the chip sector said, "When the semiconductor industry recovers, Samsung Electronics will benefit the most since it didn't cut output."

LG Energy Solution on the same day said its CEO and Vice Chairman Kwon Young-soo bought 1,000 shares of the company for 572.8 million won, or 572,800 won per share. In April last year, he purchased the same number of shares at 420,000 won each.

“Vice Chairman Kwon expressed his intent to practice responsible management and enhance shareholder value," his company said. "This is meaningful for raising future customer value and boosting shareholder trust."

LG Electronics President and CEO Cho Joo-wan is also among executives buying back company stock. On Feb. 29, he bought 2,000 shares of his company on the market for 227.2 million won, or 113,600 won each.

With LG Electronics' stock rising over 30% since early this year, market interest has grown in the CEO's buyback. He has pledged to streamline the company's portfolio and build a future-oriented business structure.

LG Electronics' TV unit is expediting changes in the content and service sector, and its electronic vehicle equipment unit, which returned to the black last year, is considered on a growth trajectory.

Write to Jeong-Soo Hwang and Han-Shin Park at hjs@hankyung.com