Samsung announced that its chairman Lee has lost his life to a heart attack after six years in hospital
Analysts hope that his departure will lead to restructuring and higher dividends for shareholders
The shares of Samsung Electronics (KRX: 005930) – the largest company in the group – closed the day 0.33% higher
Shares in Samsung-owned companies rose today in Asia following yesterday’s announcement of the death of Chairman Lee Kun-hee.
Fundamental analysis: investors hope for restructuring
On Sunday, Samsung announced that 78-year-old Lee lost his life after six years in hospital due to a heart attack. Lee Kun-hee has contributed to making Samsung a global technology and industry giant. He joined Samsung in 1987 after the death of his father Lee Byung-chul, the founder of the company.
Analysts now hope that his departure will lead to restructuring and higher dividends for shareholders.
“His legacy will be immortal,” the company said in a statement.
After running into health problems from 2014, Lee Kun’s son Jay Y. Lee became de facto head of the conglomerate.
“Now the market is in turmoil because of Jay Y. Lee,” said SK Kim, executive director and analyst at Daiwa Securities.
“He is the de facto leader of the Samsung Group,” Kim added. “He is a major shareholder of Samsung C&T and Samsung SDS, so the market responded positively to the news”.
Kim said Samsung is likely to take aggressive steps to ensure long-term growth momentum and possibly even improve shareholder returns. Kim expects the company to achieve a good result next year thanks to its memory business and the increased adoption of 5G wireless technology.
Technical analysis: Share price rises
After Lee’s death, the Samsung C&T share gave up some gains of over 17% and closed in the green with 13.46%. The shares of Samsung SDS increased by 5.51%, while Samsung Life Insurance (KRX: 03283) gained 3.8%.
Daily chart of Samsung Electronics (TradingView)
Only Samsung BioLogics and Samsung Engineering were unable to maintain their previous profits and closed in the red with 0.94% and 2.71% respectively. The share price of Samsung Electronics (KRX: 005930) – the largest company in the group – closed the day 0.33% higher. Last week the share reached an 8-month high of over 60000 won per share.
The shares of Samsung Electronics and most other Samsung divisions rose one day after the death of their chairman Lee Kun-hee. Investors hope that the company will now begin the long-awaited restructuring process.