- Samsung announced that its chairman Lee lost his life following six years in the hospital to a heart attack
- Analysts are hoping that his departure will lead towards restructuring and higher dividends for shareholders
- Shares of Samsung Electronics (KRX: 005930) – the group’s biggest firm – closed the day 0.33% higher
Shares of companies owned by Samsung rose today in Asia after yesterday’s news of Chairman Lee Kun-hee’s death.
Fundamental analysis: Investors hope for a restructuring
On Sunday, Samsung announced that Lee, 78, lost his life following six years in the hospital to a heart attack. Lee Kun-hee helped make Samsung a worldwide technology and industrial giant. He stepped up as the leader of Samsung in 1987 following the death of his father, Lee Byung-chul, who was the company’s founder.
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Analysts are now hoping that his departure will lead towards restructuring and higher dividends to shareholders.
“His legacy will be everlasting,” the company said in a statement.
After he started experiencing health difficulties in 2014, Lee Kun’s son Jay Y. Lee became the de facto head of the conglomerate.
“Now the market is interested in the impact from the succession 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 market reacted positively on the news.”
Kim said that Samsung will likely take aggressive steps to ensure long-term growth momentum and may even improve shareholder returns. Kim believes the company will report strong earnings results next year, thanks to its memory operations and increased adoption of 5G mobile technology.
Technical analysis: Shares head higher
Following Lee’s death, Samsung C&T’s stock gave up some gains from over 17% to close 13.46% in the green. Shares of Samsung SDS advanced 5.51%, while Samsung Life Insurance (KRX: 03283) moved up 3.8%.
Samsung Electronics daily chart (TradingView)
Only Samsung BioLogics and Samsung Engineering failed to maintain their earlier gains and closed 0.94% and 2.71% in the red, respectively. Samsung Electronics (KRX: 005930) – the group’s biggest company – stock price closed the day 0.33% higher. Last week, the stock created an 8-month high above 60000 won per share.
Shares of Samsung Electronics and most of other Samsung divisions climbed a day after the death of its chairman Lee Kun-hee. Investors are hoping that the company will now embark on a long-awaited restructuring process.