March 23, 2018 / 12:43 AM / 6 months ago

Trade fears loom as Samsung Electronics shareholders approve stock split

SEOUL (Reuters) - Samsung Electronics Co Ltd shareholders approved a stock split on Friday making it easier for retail shareholders to hold shares in the tech giant, at an annual meeting also dogged by concerns about global trade tensions.

Shareholders queue in line to enter the Samsung Electronics Co. annual general meeting at the company's Seocho office building in Seoul, South Korea, March 23, 2018. SeongJoon Cho/Pool via Reuters

The meeting showcased changes the South Korean firm has made in recent years to build investor goodwill, such as strengthening its dividend policy to share the fruits of a memory chip boom that underpinned record profits in 2017.

Shareholders approved the 50:1 stock split announced in January, as well as the appointment of new board directors.

But the meeting was overshadowed by prospects of a trade war following U.S. moves to impose anti-China tariffs over what Washington says is misappropriation of U.S. intellectual property, and Chinese threats of retaliation.

Shareholders look at annual reports during the Samsung Electronics Co. annual general meeting at the company's Seocho office building in Seoul, South Korea, March 23, 2018. SeongJoon Cho/Pool via Reuters

Samsung Electronics is South Korea’s biggest exporter, recording $134.7 billion in export sales in 2017, and is vital to global electronics supply chains.

Outgoing chairman of the board Kwon Oh-hyun told the meeting Samsung Electronics expected uncertainty from trade protectionism and geopolitical risk to remain through 2018.

“In a broad sense, we expect uncertainties such as trade protectionism and geopolitical risks to persist throughout the year, and the paradigm in the IT industry to keep shifting,” Kwon said.

HIGHER CHIP DEMAND

Co-CEO Kinam Kim told the meeting in Seoul that the company, the world’s leading manufacturer of semiconductors, expects demand to increase for value-added memory chips handling large data this year.

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It also expected greater uncertainty in the organic light-emitting diode (OLED) panel business due to stiffer competition between OLED and liquid crystal display (LCD) panels, and from Chinese LCD makers, said Kim, who heads the company’s Device Solutions division.

On the mobile front, co-CEO and head of the IT & Mobile division, DJ Koh, said the slowdown in mobile market growth was expected to intensify competition this year, making the market environment difficult.

Samsung Electronics’ mobile business, which vies with Apple Inc for global dominance, needed more time to recover in China following a reorganization of its sales network there last year, he said. The firm’s share of the world’s biggest smartphone market has fallen below 10 percent in the past year.

Samsung Electronics Vice Chairman Jay Y. Lee, who has been out after a year-long detention since receiving a suspended sentence for bribery earlier this year, did not attend.

Lee, who remains a board director, has not appeared in a public schedule since an early February release.

Reporting by Joyce Lee; Editing by Stephen Coates

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