Shares of Samsung Electronics continued to gain Monday, following the company’s announcement of a share buyback plan worth 10 trillion won ($7.17 billion) on Friday, partly recovering from a steep decline the previous week.

Samsung Electronics shares closed trading at 56,700 won Monday, up 3,200 won or 5.98 percent from the previous trading day, according to the Korea Exchange. During intraday trading, the price surged to as high as 57,500 won.

The rebound comes after the shares sank to an over four-year low of 49,900 won Thursday, which pulled down the company’s market capitalization to under 300 trillion won.

Samsung shares started their recovery with an over 7 percent surge on Friday, backed by retail investors’ bargain hunting. With Monday’s gain, Samsung had recovered by nearly 7,000 won in two trading days, pulling up the company's market cap to 338 trillion won.

Amid the fluctuating share prices, Samsung Electronics rolled out a stock buyback plan on Friday to enhance shareholder value.

Under the scheme, the company will purchase treasury shares worth a combined 10 trillion won within a year. Of the amount, 3 trillion won's worth of shares will be canceled within three months starting Monday. The company said the remaining 7 trillion won budget will be executed within a year.

It was the first treasury share retirement plan announced by the tech giant since a buyback of 9.3 trillion won in 2017.

The company's share buyback plan sparked a surge in shares of its affiliates Samsung Life Insurance and Samsung Fire & Marine Insurance, which hold an 8.51 percent and 1.49 percent stake in the tech giant, respectively.

Under the principles of separation of industrial and financial capital, the insurers' combined holdings in Samsung Electronics cannot exceed 10 percent. As shareholders see a boost in their ownership stake when treasury shares are taken out of circulation, the two insurers are expected to sell part of their stakes in the tech company and in turn, up their dividend payouts.

Samsung Life Insurance closed trading at 108,800 won, inching up 11.48 percent on-day, and Samsung Fire & Marine Insurance wrapped up at 369,000 won, gaining 10.48 percent.

Market watchers believe the Samsung Electronics stock price is likely to continue its gain for a while, bolstered by the buyback plan.

"Samsung Electronics is likely to have decided on treasury stock cancellation to boost the weak stock price," analyst Park Sang-wook from Shinyoung Securities said. “Though the share price has been held down by concerns about the company’s weakened competitiveness, there is a possibility that the price will continue to gain.”

Others stressed the treasury stock retirement plan is a short-term solution to boost the struggling stock price.

“Samsung Electronics’ share buyback decisions have worked as momentum for a short-term rally in the past,” noted analyst Kim Dong-won from KB Securities.

“But longer rallies have been driven by earnings growth bolstered by industrial recovery," he said, adding a more stable increase will come from strengthening the company’s presence in the chip market.