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kweichow moutai's announcement on the plan to repurchase the company's shares through centralized bidding transactions

on the evening of september 20, kweichow moutai issued an announcement that the company will use its own funds to repurchase shares for cancellation and reduction of the company's registered capital. the repurchased share amount will not be less than rmb 3 billion (inclusive) and not more than rmb 6 billion (inclusive). the upper limit of the repurchase price is rmb 1,795.78 per share (inclusive). the number of repurchased shares will be between 1,670,583 and 3,341,164 shares, and the number of repurchased shares will account for 0.1330% to 0.2660% of the company's total share capital.

the announcement also revealed that the controlling shareholder, actual controller, directors, supervisors and senior management have no plans to reduce their holdings in the company's shares in the next three months or the next six months.

the reporter found that this was the first time that kweichow moutai, a major dividend payer, had implemented a cancellation-style repurchase in its 23 years since its listing. it was also the second time that kweichow moutai announced major good news one month after it announced its three-year cash dividend plan.

source: eastmoney

according to the announcement, as of june 30, 2024, the company's total assets were rmb 279.207 billion, net assets attributable to shareholders of the listed company were rmb 218.576 billion, and cash and cash equivalents were rmb 145.267 billion. assuming that the rmb 6 billion upper limit of the repurchase funds has been fully used, the repurchase funds account for approximately 2.1489% of the company's total assets as of june 30, 2024, 2.7450% of the net assets attributable to shareholders of the listed company, and 4.1303% of cash and cash equivalents.

regarding this repurchase plan, kweichow moutai stated that the purpose of this share repurchase is to safeguard the interests of the company and the majority of investors and enhance investment confidence.

it is worth mentioning that at the 2024 semi-annual performance briefing, when facing the question raised by investors about whether the company has the intention to repurchase shares, kweichow moutai said that it would combine the stock market situation and the company's actual situation to conduct a systematic study on different market value management measures, and any subsequent plans would be announced in a timely manner in accordance with relevant regulations. however, kweichow moutai kept its promise. only 11 days later, the company's repurchase plan was officially released. from an investment perspective, this is also a manifestation of kweichow moutai's active response to investors' concerns.

historically, kweichow moutai has increased its holdings of its own stocks four times. the first increase was in 2010, when the liquor industry was affected by macroeconomic fluctuations and market confidence was shaken. moutai group increased its holdings against this background. the second time was in 2012, when there was a crisis of confidence in the liquor industry and the stock prices of liquor companies fell sharply. moutai group increased its holdings against the trend. the third time was in 2013. although kweichow moutai rebounded in the early stage, it was still in a state of shock adjustment as a whole. moutai group continued to increase its holdings against this background. the fourth time was in 2023, when moutai group increased its holdings by 919,600 shares and moutai technology development company increased its holdings by 37,600 shares.

kweichow moutai's announcement on cash dividend return plan for 2024-2026

on the other hand, in terms of giving back to consumers, kweichow moutai can be said to be a well-known dividend payer in the stock market. according to wind data, the company's cumulative dividends since its listing are 232.6 billion yuan. on august 8, 2024, kweichow moutai announced the "2024-2026 annual cash dividend return plan". from 2024 to 2026, the company's total cash dividends distributed each year shall not be less than 75% of the net profit attributable to the parent company in that year. in principle, dividends will be paid twice a year.

kweichow moutai shares weekly k change (source: baidu stock market)

however, kweichow moutai's cancellation-style repurchase is also seen as an important means of maintaining the company's stock price. from the market perspective, the latest wholesale reference price disclosed by today's wine price shows that the price of 2024 feitian moutai loose bottles is 2,365 yuan/bottle, the same as the previous day; the price of 2024 feitian moutai original box is 2,470 yuan/bottle, a further drop of 20 yuan from the previous day. from the perspective of stock price, the overall trend of kweichow moutai's stock price this year is "weak". since may, it has shown a clear downward trend. yesterday's lowest price reached 1,245.83 yuan/share, setting a new low in nearly 4 years. as of today's close, kweichow moutai's stock price closed at 1,263.92 yuan/share, and the stock price has fallen by more than 25% this year.

the reporter learned that if kweichow moutai's cancellation-style repurchase is completed, it will mean a reduction in the company's share capital. under the condition that the current profit and dividend ratio remains unchanged, financial indicators such as earnings per share, return on net assets per share, and dividends per share will increase, which in theory will help increase distributable earnings per share.

source: poster news