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Recently, as the A-share market continues to be sluggish and volatile, the number of cases of listed companies repurchasing shares has increased.

On the evening of July 30, A-share listed companies such as Foxconn and Shenma announced repurchase plans worth 100 million yuan. According to a Securities Times reporter, since July this year, more than 20 companies including Sungrow Power Supply, Shanzi Hi-Tech, Shanghai Airport, Kingfa Technology, and East Sunshine have announced repurchase plans worth no less than 100 million yuan.

Judging from the progress of the implementation of repurchases, A-share listed companies have repurchased more than 110 billion yuan since the beginning of this year. The repurchase amount of many companies such as WuXi AppTec, San'an Optoelectronics, CATL, SF Holdings, and Baosteel Group is no less than 1 billion yuan.

Market analysts pointed out that the positive role of repurchase in optimizing the investment and financing structure of the capital market, maintaining the investment value of the company, and improving the investor return mechanism has gradually become more prominent. In the context of the new "Nine National Policies" promoting high-quality development of the capital market and the regulatory authorities' continued emphasis on shareholder returns, the enthusiasm of listed companies for repurchase is expected to increase further.

Many listed companies announced repurchase plans worth hundreds of millions of yuan

As the market continues to fluctuate recently, many listed companies have announced repurchase plans worth hundreds of millions of yuan.

On the evening of July 30, Foxconn Industrial Internet announced that the company plans to repurchase shares through centralized bidding transactions, with a total repurchase amount of no less than 200 million yuan and no more than 300 million yuan, and the repurchased shares will be used for cancellation to reduce registered capital. Under the condition that the repurchase price does not exceed 40.33 yuan per share, if calculated according to the upper limit of the total repurchase funds, the estimated number of shares that can be repurchased is about 7.4386 million shares, accounting for about 0.04% of the company's current total share capital; if calculated according to the lower limit of the total repurchase funds, the estimated number of shares that can be repurchased is about 4.9591 million shares, accounting for about 0.02% of the company's current total share capital.

Coincidentally, Shenma Group also announced a repurchase plan of over 100 million yuan on the evening of July 30. The company said that based on its confidence in the company's future development and recognition of the company's value, the company plans to repurchase 150 million to 200 million yuan of shares, and all the repurchased shares will be used to reduce the company's registered capital.

In addition, several companies announced their proposed repurchase plans tonight, with the highest repurchase scale reaching 100 million yuan.

Nord shares announced that it plans to repurchase the company's shares for RMB 50 million to RMB 100 million, with the repurchase price not exceeding RMB 4.5 per share. The purpose of this share repurchase is to maintain the company's value and shareholder rights.

Liangxin Shares announced that the board of directors received a letter from the company's chairman Ren Silong on July 26, 2024, proposing to repurchase the company's shares. Ren Silong proposed that the company use its own funds to repurchase part of the company's issued RMB common shares (A shares) through the Shenzhen Stock Exchange trading system in a centralized bidding transaction. The repurchase amount shall not be less than RMB 50 million and not more than RMB 100 million.

According to incomplete statistics from Securities Times reporters, since July this year, at least 20 A-share listed companies have announced repurchase plans of no less than 100 million yuan. According to the lower limit of the repurchase amount, Shanzi Hi-Tech and Sungrow Power Supply have the largest repurchase amounts, both of which are no less than 500 million yuan.

On the evening of July 26, Shanzi Hi-Tech issued an announcement stating that it plans to repurchase the company's shares for 600 million to 1 billion yuan, and the repurchase price will not exceed 1.60 yuan per share.

On the evening of July 15 this year, Sungrow Power Supply announced that, taking into account the company's financial condition, operating conditions and future profitability, the company plans to repurchase 500 million to 1 billion yuan of company shares. The repurchase price will not exceed 97 yuan per share. The repurchase period will be within 12 months from the date the board of directors deliberates and approves the share repurchase plan.

Looking at the long run, since the beginning of this year, many leading companies such as Hikvision, Tongwei Co., Ltd., Yili Group, and WuXi AppTec have actively repurchased shares, and the lower limit of the announced proposed repurchase amount is no less than 1 billion yuan.

The amount of A-share repurchases this year exceeded 110 billion yuan

Under the guidance and support of regulators, the repurchase enthusiasm of A-share listed companies has continued to rise since the beginning of this year, and the number and scale of repurchases have increased significantly.

Wind data shows that as of July 30, 1,798 companies have entered the share repurchase implementation stage this year, with a total repurchase amount of 114.886 billion yuan and a total number of repurchased shares of 13.552 billion shares. The repurchase amount exceeds 91.5 billion yuan for the whole year of 2023.

In terms of the repurchase amount, this year 277 A-share listed companies implemented repurchase amounts of no less than 100 million yuan. WuXi AppTec, San'an Optoelectronics, CATL, and SF Holdings ranked at the top, with repurchase amounts all exceeding 1 billion yuan.

It is worth noting that recently, "cancellation-style repurchase" has frequently appeared in listed companies. Industrial Foxconn and Shenma Shares clearly stated in their announcements that this repurchase will be used for share cancellation.

On June 20 this year, SF Holding announced that the company had completed the cancellation procedures for 79.2912 million repurchased shares on that day, and the number of cancelled shares accounted for 1.62% of the company's total share capital before cancellation.

On May 23, WuXi AppTec announced that the company had completed two rounds of share repurchase plans this year, spending a total of 2 billion yuan to repurchase and cancel shares.

On May 20, Yili Group issued an announcement that it plans to repurchase shares at a price of 1 billion to 2 billion yuan, with the repurchase price not exceeding 41.88 yuan per share (inclusive), and all repurchased shares will be cancelled.

Chen Guo, chief strategy analyst at CITIC Securities, said that "cancellation-style repurchase" will increase the value of each share, and the market performance of related companies is expected to be enhanced. Listed companies repurchase shares and then cancel them, resulting in a decrease in share capital. Under the condition that the current profit and dividend ratio remain unchanged, financial indicators such as earnings per share, return on net assets per share, and dividends per share will increase, thereby increasing the intrinsic value of listed companies' stocks.

Some listed companies that have already announced share repurchase plans have proactively adjusted the repurchase purpose to cancellation. Recently, Ping An of China issued a reminder announcement that based on its confidence in the company's future development, it plans to change the purpose of the relevant repurchased shares and cancel 103 million A-shares deposited in the company's special repurchase securities account. Based on the latest price, the value of these shares exceeds 4 billion yuan.

Buyback enthusiasm is expected to continue

The active repurchase of shares by listed companies cannot be separated from the guidance of supervision.

At the opening ceremony of the 2024 Lujiazui Forum, Wu Qing, Chairman of the China Securities Regulatory Commission, stated that listed companies will be further guided to establish the awareness of actively returning to investors, strengthen communication with investors, improve information transparency and governance norms, and better use cash dividends, repurchases and cancellations to give back to investors.

Xie Xiaobing, head of the Property Rights Management Bureau of the State-owned Assets Supervision and Administration Commission of the State Council, said earlier at a press conference held by the State Council Information Office that the effectiveness of market value management will be included in the assessment of the heads of central enterprises, guiding them to pay more attention to the market performance of the listed companies they control, and promptly convey confidence and stabilize expectations through market-oriented means such as increasing holdings and repurchases, increase cash dividends and better return to investors.

According to the research opinion of China Merchants Securities, under the new "Nine National Regulations", "listed companies are guided to repurchase shares and cancel them according to law", and stock repurchases may become an important source of incremental funds in the future.

CITIC Securities Research pointed out that in the case of a sluggish market, a company's stock repurchase is conducive to boosting market confidence and stabilizing stock prices. In addition, stock repurchase is also conducive to improving the equity structure and reducing the risk of potential hostile takeovers. Cancellation-style repurchases can reduce the outstanding share capital, increase earnings per share and return on equity, and enhance market confidence, thereby boosting stock prices in the short term.

Source: Securities Times official microblog

Statement: All information content of Databao does not constitute investment advice. The stock market is risky and investment should be cautious.

Editor: He Yu

Proofreading: Zhu Tianting

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