7.3 billion yuan hits a new high! 106 Shandong stocks have strong confidence in repurchase
2024-08-10
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Faced with the correction in the A-share market, many Shandong stocks have started the "buy, buy, buy" mode, using "real money" to repurchase shares in the secondary market, demonstrating their confidence in future development.
The Economic Herald reporter found through Wind Information statistics that as of August 7, 106 Shandong stocks have been repurchased this year, with a total cost of 7.3 billion yuan. Both the number of listed companies that repurchased shares and the repurchase amount set a record high for the same period.
Among them, there were 20 Shandong listed companies whose repurchase amount exceeded 100 million yuan. Hisense Visual Technology (600060.SH) had the highest repurchase amount of 562 million yuan this year; Goertek (002241.SZ), Haier Smart Home (600690.SH), and Buchang Pharmaceutical (603858.SH) all repurchased more than 400 million yuan.
"The peak of buybacks often occurs at the bottom of the market, which will benefit listed companies and increase the value of the company's stock." Zhang Quan, a Jinan investor who has been paying close attention to the capital market, told the Economic Herald reporter that the downward market valuation and the optimization of the buyback system are the reasons for the increase in buybacks by listed companies. You can pay attention to investment opportunities in individual stocks with higher buyback amounts.
Some industry analysts also said that since the introduction of the new "Nine National Policies", the focus of capital market reform has shifted to the investment side, and listed companies have paid more attention to returns to investors. The number of cases of "repurchasing shares for cancellation" has gradually increased. This move can better return investors' money, and related companies are worthy of attention.
Shandong stocks repurchase tide surges
In August, many Shandong listed companies, including Liqun Holdings (601336.SH) and Binhua Holdings (601678.SH), issued announcements on the progress of their share repurchases.
In July, Liqun Co., Ltd. repurchased 33.7808 million shares in the secondary market through centralized bidding, with a total payment of 172 million yuan; Binhua Co., Ltd. repurchased 5.6842 million shares through centralized bidding in July, with a payment of 19.9963 million yuan, which also brought the company's total expenditure on this round of share repurchases to 129 million yuan.
Economic Herald reporters found that since the beginning of this year, the number of Shandong listed companies that have repurchased shares and the amount involved have increased significantly, showing that in the face of adjustments in the secondary market, Shandong stocks are increasingly paying attention to the reflection of their own value and returns to investors.
Among them, there were 20 Shandong listed companies whose repurchase amount exceeded 100 million yuan this year. Hisense Visual Technology, Goertek, and Buchang Pharmaceutical ranked the top three with 562 million yuan, 497 million yuan, and 470 million yuan respectively. Haier Smart Home followed closely with a repurchase amount of 467 million yuan.
Hisense Visual's repurchase plan was launched in March this year and completed on June 21. During the period, 22.7042 million shares were repurchased, accounting for 1.74% of the company's total share capital, and the average repurchase price was 24.75 yuan per share. As a leading company in the black-and-white electronics field, Hisense Visual has benefited from factors such as the iterative update of display technology and the optimization of the market competition landscape. Its performance in 2022 and 2023 has shown significant growth, and its profitability has hit a record high since its listing in 2023. The company's stock price also climbed to a high in February this year, but then adjusted in March. Judging from the stock price performance from March to June, Hisense Visual's initiation of repurchases has played a positive role in stabilizing its stock price.
Goertek and Haier Smart Home are frequent buyers of share repurchases. Goertek completed three rounds of repurchases from October 2018 to March 2019, from December 2019 to April 2020, and in February 2021, respectively, involving repurchase funds of 357 million yuan, 516 million yuan, and 2 billion yuan. The company's ongoing repurchase will start in November 2023, and the repurchase amount has reached 675 million yuan so far, of which 497 million yuan has been repurchased this year.
Haier Smart Home completed three rounds of repurchases from August 2015 to February 2016, March 2021 to November 2021, and March 2022 to February 2023, with repurchase amounts of RMB 160 million, RMB 2.202 billion, and RMB 1.51 billion, respectively. This round of repurchases started in September 2023, and RMB 1.88 billion has been repurchased so far, with a repurchase amount of RMB 467 million this year.
In general, the repurchase amount and number of Shandong stocks have shown a clear growth trend in recent years.
For example, from 2015 to 2017, the annual share repurchase amount of Shandong stocks was only 105 million yuan, 491 million yuan and 146 million yuan, and the number of companies that repurchased shares were 11, 15 and 14 respectively.
From 2018 to 2020, Shandong stocks' enthusiasm for share repurchases increased significantly, with the annual repurchase amounts reaching 3.155 billion yuan, 4.317 billion yuan and 2.733 billion yuan, respectively; the number of listed companies that repurchased shares also increased to 29, 46 and 40, respectively.
From 2021 to 2024, the amount of Shandong's share repurchase expenditures further jumped to 6.356 billion yuan, 7.594 billion yuan, and 5.208 billion yuan, respectively. Especially this year, after only 7 months, the amount of Shandong's share repurchases has reached 7.3 billion yuan, exceeding the repurchase amount for the whole year of 2021 and 2023.
“Cancellation-style” buybacks are increasing
Regarding the increase in the repurchase amount of Shandong stocks, the industry insiders interviewed believed that on the one hand, it was because of the market adjustment, the stock price fell to a low level, making it difficult to reflect the company's value; on the other hand, it was driven by policies and listed companies attached importance to returns to investors.
Zhang Quan believes that as the number of share repurchase cases increases, market confidence will gradually be boosted and the bottom will be further solidified. The A-share market, especially individual stocks with higher repurchase amounts, is expected to see a medium- and long-term valuation recovery.
Industrial Securities also stated in its research report that the repurchase of listed companies often indicates the confidence of the company in the growth of profitability and the improvement of profit quality, which helps to maintain the value of the company; at the same time, it can also send positive signals to investors and boost investors' expectations for the overall subsequent development of listed companies. The more typical "repurchase tide" in the history of A-shares mainly includes June to September 2015, October 2018 to March 2019, and December 2023 to February 2024, all of which appeared at the stage bottom of the index.
It is worth noting that while listed companies are actively repurchasing shares, investors' attention to the details of the repurchase is also increasing, and more and more attention is focused on how companies dispose of the repurchased shares.
Cui Rongzhe, a Qingdao investor who has been paying close attention to the capital market, told the Economic Herald that there are many ways for companies to dispose of repurchased shares, such as implementing employee stock ownership plans, equity incentives or cancellation, but the "gold content" of these ways is not the same. "Cancellation is the most effective way to increase the value of listed companies' stocks, because cancellation will reduce registered capital accordingly and increase earnings per share."
Yang Delong, chief economist of Qianhai Kaiyuan Fund, said that the new "National Nine Articles" clearly guide listed companies to cancel their shares after repurchasing them according to law. It is gradually becoming a market consensus to allow investors to have returns and a sense of gain and to increase the investment value of the A-share market.
The Economic Herald reporter noticed that among the Shandong stocks that repurchased shares this year, although less than 10% chose to cancel their shares, there have been signs of growth recently.
For example, on July 31, Stanley (002588.SZ) announced that the company's repurchase plan has been implemented, the repurchase period is from January 26 to July 29, 2024, and the total transaction amount is 30.2253 million yuan. "The repurchased shares will be used to cancel them according to law and reduce the company's registered capital accordingly."
Jinlei Holdings (300443.SZ) announced on July 29 that the company's share repurchase implementation period has expired, and the repurchased share amount has reached 100 million yuan. "This share repurchase is necessary to maintain the company's value and shareholders' rights and interests. The repurchased shares will be cancelled and the registered capital will be reduced in the future."
In addition, Shandong listed companies such as Nanshan Aluminum (600219.SH) and Liqun Holdings (601366.SH), which are currently implementing share repurchases, have also stated that after the repurchase is completed, all repurchased shares will be used to cancel and reduce registered capital.
Mid- to long-term performance is worth looking forward to
Of course, repurchase by listed companies is only one aspect that affects stock prices in the short term. The capital market environment, industry prosperity, and business performance will also have an impact on transactions in the secondary market.
Therefore, judging from the stock price performance of listed companies after they repurchased shares, some listed companies have seen a significant increase, but some listed companies are still fluctuating at a low level.
Weihai Guangtai (002111.SZ), which started to repurchase shares in February this year, has repurchased more than 75 million yuan, with an average repurchase price of about 6.64 yuan per share. The company's current share price is around 11 yuan per share, which has risen by more than 60% compared with its average repurchase price.
Goertek began to implement share repurchases in November last year, and has repurchased 675 million yuan so far, with an average repurchase price of about 17.11 yuan per share. The company's stock price is now around 20 yuan per share, up about 18% from the repurchase price.
Analyzing the reasons for the stock price increase, in addition to large-scale repurchases, the two companies have performed well this year. Weihai Guangtai expects its net profit attributable to shareholders of the parent company to be 100 million to 120 million yuan in the first half of the year, a year-on-year increase of 72.43% to 106.91%; Goertek expects its net profit attributable to shareholders of the parent company to be 1.181 billion to 12.165 billion yuan in the first half of the year, a year-on-year increase of 180% to 200%.
The stock price of Debon Technology (688035.SH) has not performed well recently. Although the company started the repurchase in December last year and has repurchased more than 44 million yuan so far, the company's stock price has still fallen by about 45% this year; Weigao Orthopedics (688161.SH) started the repurchase in September last year and has repurchased nearly 70 million yuan so far, but this has not saved the company's stock price. It is worth noting that the performance of both companies this year has shown a downward trend. Debon Technology's net profit attributable to shareholders of the parent company fell by 16.31% and 42.70% last year and the first quarter of this year, respectively, while Weigao Orthopedics' net profit attributable to shareholders of the parent company fell by 81.30% and 62.92% last year and the first quarter of this year, respectively.
In addition, although it is mentioned above that different ways of repurchasing shares for cancellation, equity incentives, etc. have different meanings for stock prices, the short-term stock price performance is not so clear. In this regard, the interviewees believe that repurchases reflect the judgment of listed companies on medium- and long-term valuations, and it is recommended that investors use repurchases as a reference factor for medium- and long-term layout.
Investors should also keep their eyes open and consider the listed companies that have taken out "real money" for repurchase. According to statistics from the Economic Herald, most companies in the A-share market that announced repurchases will implement them quickly after the repurchase plan is voted through by the shareholders' meeting. However, there are also some companies that have not made any moves. For example, Sanboshuo (001300.SZ), a Shandong stock, has not implemented the repurchase plan it passed in March this year, and the company's stock price has continued to fall since April, with a cumulative decline of more than 30%.
(Economic Herald reporter Shi Chao)
