In 2022, with the continuous adjustment of the A-share market, listed companies also began to stage a repurchase relay race. Wind data shows that since 2022, 100 listed companies have offered share repurchase schemes. In terms of repurchase amount, the maximum repurchase amount of 30 listed companies exceeds 100 million yuan, and the maximum repurchase amount of Zhejiang Century Huatong Group Co.Ltd(002602) (002602) and Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) is as high as 1 billion yuan. The reporter of Beijing business daily noted that the share prices of several stocks fell significantly when launching the share repurchase plan, and Touchstone International Medical Science Co.Ltd(688013) and other stocks threw out the repurchase plan when the share price hit a new low this year.
the maximum repurchase amount of 30% of individual shares is more than 100 million
According to wind data, since 2022, a total of 100 A shares have thrown out the share repurchase plan, of which 30% of the shares have a maximum repurchase amount of more than 100 million yuan.
Take Beijing Sanlian Hope Shin-Gosentechnical Service Co.Ltd(300384) which recently disclosed the share repurchase scheme as an example. On February 15, Beijing Sanlian Hope Shin-Gosentechnical Service Co.Ltd(300384) announced that the company plans to use its own funds to repurchase part of the company’s social public shares in the form of centralized bidding transaction for the implementation of equity incentive or employee stock ownership plan. The total amount of repurchase funds is no less than 30 million yuan and no more than 50 million yuan.
In terms of repurchase amount, Orient Group Incorporation(600811) , Hangzhou Tigermed Consulting Co.Ltd(300347) and other 30 shares have a maximum repurchase amount of more than 100 million yuan. Among them, Zhejiang Century Huatong Group Co.Ltd(002602) and Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) have the highest repurchase amount, which is 1 billion yuan.
Specifically, on February 12, Zhejiang Century Huatong Group Co.Ltd(002602) announced that the company plans to use its own funds or self raised funds to buy back the company’s shares in the form of centralized bidding transaction for the later implementation of equity incentive plan, employee stock ownership plan or reduction of registered capital. The total repurchase funds shall be no less than 500 million yuan and no more than 1 billion yuan. The repurchase plan of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) was disclosed earlier. On January 13, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) announced that the company plans to use its own funds to repurchase some social public shares of the company in the form of centralized bidding transaction, with a repurchase amount of 1 billion yuan. The repurchased shares will be cancelled and the registered capital will be reduced according to law.
In terms of the expected number of shares to be repurchased, Orient Group Incorporation(600811) is expected to have the highest number of shares to be repurchased, about 133 million shares, Zhejiang Century Huatong Group Co.Ltd(002602) is followed by Zhejiang Century Huatong Group Co.Ltd(002602) , and the expected number of shares to be repurchased is 100 million shares. In terms of the proportion of repurchased shares in the total share capital, the number of shares to be repurchased by Touchstone International Medical Science Co.Ltd(688013) accounts for the most, accounting for about 5.43% of the total share capital.
From the perspective of repurchase methods, these 100 share repurchase methods are mainly divided into centralized bidding transaction and directional repurchase. The repurchase purposes mainly include the implementation of equity incentive, equity incentive cancellation, market value management and other situations.
“The primary purpose of share repurchase by listed companies is to release positive signals to the secondary market, maintain the share price of the secondary market and protect the stability of the market. The treasury shares after repurchase can be used for equity incentive, direct cancellation of registered capital, sale in the secondary market and other purposes,” said Zhou Yunnan, founder of Beijing Nanshan investment.
The share prices of individual stocks such as Touchstone International Medical Science Co.Ltd(688013) hit a new low in the year
Beijing Business Daily reporter noted that the disclosure of repurchase plans by listed companies often occurs when the company’s share price falls. For example, Touchstone International Medical Science Co.Ltd(688013) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and other stocks threw out the repurchase plan when the stock price was under pressure, and the share price of some stocks hit a new low this year before the repurchase.
Take Touchstone International Medical Science Co.Ltd(688013) as an example. According to China stock market news, on February 8, Touchstone International Medical Science Co.Ltd(688013) hit a record low of 22.11 yuan / share. On that day, Touchstone International Medical Science Co.Ltd(688013) announced that based on confidence in the company’s future development and recognition of the company’s value, in order to establish and improve the company’s long-term incentive mechanism and fully mobilize the enthusiasm of the company’s employees, the company plans to repurchase shares through centralized bidding. The repurchase amount shall not be less than 50 million yuan and not more than 100 million yuan. All the repurchased shares will be used for employee stock ownership plan or equity incentive.
Hangzhou Tigermed Consulting Co.Ltd(300347) also threw out the share repurchase plan shortly after the share price hit a new low in the year. According to China stock market news, on February 11, Hangzhou Tigermed Consulting Co.Ltd(300347) intraday share price hit a new low of 88.01 yuan / share for the year. Soon after, Hangzhou Tigermed Consulting Co.Ltd(300347) announced that the company plans to use its own funds or self raised funds to repurchase some A-share shares of the company in the form of centralized bidding transaction, with a repurchase amount of no less than 250 million yuan and no more than 500 million yuan, which will be used for the later implementation of A-share equity incentive plan or A-share employee stock ownership plan.
It is worth mentioning that the share price of Hangzhou Tigermed Consulting Co.Ltd(300347) has been “halved” compared with the stage high in July last year. According to China stock market news, the cumulative decline in the Hangzhou Tigermed Consulting Co.Ltd(300347) range was 53.85% from July 5, 2021 to February 11, 2022.
The performance of individual stocks such as Orient Group Incorporation(600811) is under pressure
In addition to selling the repurchase plan at the time of the decline of share price, several stocks intend to repurchase the company’s shares under the pressure of performance.
For example, the repurchase plan of Orient Group Incorporation(600811) is disclosed together with the performance pre loss announcement in 2021. On January 29, Orient Group Incorporation(600811) disclosed that the performance forecast for 2021 showed that the attributable net profit expected to be realized by the company during the reporting period was about – 1.5 billion yuan to – 1.3 billion yuan, and the attributable net profit realized in the same period of last year was about 240 million yuan, which turned from profit to loss year-on-year.
It is worth mentioning that the attributable net profit in the first three quarters of Orient Group Incorporation(600811) 2021 is positive, and the current profit is 267 million yuan. For Orient Group Incorporation(600811) investors, the sudden huge loss of the company’s performance can be described as a “bolt from the blue”. Therefore, in order to stabilize the company’s share price, the company immediately made the decision to buy back shares.
On the night of the disclosure of the performance pre loss announcement, Orient Group Incorporation(600811) also announced that based on the confidence in the future development of the company and the recognition of the company’s value, the company plans to repurchase the people’s currency common shares (A shares) issued by the company through centralized bidding trading with its own funds of 400 million yuan to 600 million yuan through the trading system of Shanghai Stock Exchange. The repurchased shares will be used to cancel and reduce the registered capital according to law. For company related issues, the reporter of Beijing Business Daily called Orient Group Incorporation(600811) Secretary Office for an interview, but no one answered the phone.
Cheng Yu, a professional investor, said in an interview with the Beijing Business Daily that the repurchase of shares by listed companies can produce a share buyer with a clear price, which will support the stock price. There are many reasons for repurchase, such as the excessive decline of stock price in the short term due to market reasons, and the company repurchases shares for the purpose of market value management to support the stock price.
Zhou Yunnan also said that the repurchase of listed companies will generally be implemented when the company’s share price falls below the public offering or directional offering price, the share price continues to fall and repeatedly hit new lows, the company has major negative news or the company’s fundamentals have been significantly reversed.
