The repurchase boom in the A-share market continues. Since this year, 214 listed companies in the A-share market have implemented repurchase, with a total repurchase amount of about 11 billion yuan. Experts said that more than 200 companies bought back in one and a half months, highlighting the confidence of Listed Companies in their own profitability and injecting a shot in the arm into the market. However, experts also remind investors to beware of some enterprises deliberately raising share prices under the banner of stock repurchase.
About 11 billion yuan has been repurchased in
On February 14, four A-share listed companies launched repurchase plans. Among them, Suzhou Maxwell Technologies Co.Ltd(300751) the total amount of funds to be repurchased shall not be less than 162.5 million yuan, not more than 325 million yuan, and the repurchase price shall not exceed 650 yuan / share; Amoy Diagnostics Co.Ltd(300685) the total amount of funds to be repurchased shall not be less than 100 million yuan and not more than 200 million yuan; Hundsun Technologies Inc(600570) the proposed repurchase amount is not less than 100 million yuan and not more than 150 million yuan; Jiangsu Feymer Technology Co.Ltd(688350) the proposed repurchase amount shall not be less than 50 million yuan. The shares repurchased by the above four companies will be used for equity incentive or employee stock ownership plan. According to the data, as of February 15, when the reporter issued the press release, only one and a half months after the beginning of the year, 214 listed companies in the A-share market had implemented repurchase, with a total repurchase amount of about 11 billion yuan.
In terms of industry, most of the listed companies implementing repurchase are concentrated in electronics, medicine, mechanical equipment and chemical industry, including 44 in electronic industry, 28 in pharmaceutical industry, 21 in mechanical equipment industry and 12 in chemical industry. From the perspective of specific companies, the companies with high repurchase amount during the year were Zhejiang Chint Electrics Co.Ltd(601877) and Jiangsu Hengrui Medicine Co.Ltd(600276) , which were 702 million yuan and 662 million yuan respectively. In addition, the repurchase amount of Changchun High And New Technology Industries (Group) Inc(000661) , Boe Technology Group Co.Ltd(000725) and Hengli Petrochemical Co.Ltd(600346) during the year also exceeded 500 million yuan. The reporter found that the callback trend of several industry sectors with concentrated repurchase has also been relatively rapid this year. The data show that as of the closing on February 15, the electronics, medicine and biology, mechanical equipment and basic chemical industry sectors fell by 14.11%, 13.99%, 10.73% and 6.88% respectively during the year, ranking in the forefront among the 31 industry sectors with concentrated repurchase. For the company, Changchun High And New Technology Industries (Group) Inc(000661) fell by more than 35% during the year, while Zhejiang Chint Electrics Co.Ltd(601877) and Jiangsu Hengrui Medicine Co.Ltd(600276) fell by more than 18%.
Chief economist of Chuancai securities Chen Li, director of the Research Institute, told the reporter of Economic Information Daily: “Since the beginning of this year, A-Shares have experienced a significant adjustment, with the Shanghai composite index falling by 5.32% and the Shenzhen composite index falling by 10.17%. In particular, the pharmaceutical, electronic and chemical sectors have experienced a significant correction this year, and the performance of Companies in these sectors is not bad in 2021. In this case, companies in these industries will feel that the share price deviates from their own company value, and the previous performance is not good Performance also allows them to carry out repurchase operations. “
GUI Haoming, chief market expert in Hong Kong, said that the repurchase tide of listed companies usually occurs when the market is relatively depressed. Some companies feel that their performance is better, but at the same time, they feel that the stock price is seriously undervalued, so they will propose repurchase in order to maintain the stock price.
repurchase tide injects a booster into the market
Industry experts said that on the whole, the implementation of repurchase by listed companies has a certain positive significance for both the A-share market and the listed companies themselves.
“The main significance of share repurchase by listed companies at this time point is to show their financial strength, stabilize investor confidence, boost stock prices, and play a certain role as a ballast during the period of market fluctuation adjustment. At the same time, the shares repurchased can also be used for equity incentive, boost the morale of employees and promote the further development of enterprises.” Chen Li said that the repurchase will undoubtedly inject a shot in the arm into the A-share market. First of all, stock repurchase directly affects the stock market and plays a positive role in improving the stock price. More importantly, it highlights the confidence of A-share listed companies in their own profitability, shows the strength of cash flow and stabilizes the sentiment of A-share market.
GUI Haoming also said that recently, many companies in some industries such as medicine and chemical industry have experienced a significant decline. This situation is not only due to the conversion factors between market sectors, but also related to investors following suit. However, he believes that although some stocks have had a strong correction momentum recently, the share price is not low and has not reached the level of maintaining the stability of the share price. The implementation of repurchase also reflects a positive phenomenon, that is, the listed company has more confidence in itself, the cash rate of the company is also relatively good, and the operation is also good.
For investors, Chen Li reminded that it should be noted that not all listed companies implementing stock repurchase are worthy of recognition. It is necessary to beware of some enterprises deliberately raising the stock price under the banner of stock repurchase. We should carefully select the companies with good industry prospects, strong profitability, abundant cash flow and continuous and practical implementation of the repurchase policy, so that these enterprises can have investment value.
GUI Haoming also believes that there is no need to pay too much attention to repurchase. Investment still depends on the comprehensive performance. Repurchase can not really stabilize the stock price. It is often just a transmission of confidence, and the market trend can not be determined by repurchase. “We have seen this phenomenon repeatedly in the past, and billions of buybacks have not really stabilized the stock price. It still depends on the performance.” He also reminded investors that the repurchase of some companies may only be a formal repurchase.
