With the continuous adjustment of the market since this year, the repurchase enthusiasm of listed companies is heating up rapidly.
On March 10, the 400 billion household appliance giant Midea Group Co.Ltd(000333) threw out its seventh large repurchase plan since its listing. The total amount of repurchase funds is no more than 5 billion yuan and no less than 2.5 billion yuan. The total repurchase amount of the company has reached RMB 333.1 billion every year since the launch of the repurchase plan in 2018.
At the same time, listed companies that have issued repurchase plans are also stepping up the implementation of repurchase Saic Motor Corporation Limited(600104) 3 March 10 announced the progress of share repurchase, which said that as of March 10, 2022, the company had repurchased 694587 million shares, accounting for 0.5945% of the total share capital of the company, and the total paid capital reached 1.331 billion yuan.
The analysis shows that the main reason for enterprises to buy back the company’s shares is that the company’s share price is undervalued. On the one hand, share repurchase can send a signal to investors that the company is optimistic about the future share price, which is conducive to stabilizing the company’s share price. On the other hand, it is conducive to reducing the cost of equity incentive.
Repurchase plan of more than leading enterprises
Share repurchase is an important means for listed companies to boost market confidence and maintain their own share price.
At the time of market downturn, Midea Group Co.Ltd(000333) 3 on March 10, the company again launched a large repurchase plan, with the repurchase amount of 2.5 billion yuan to 5 billion yuan. The way for the company to buy back shares this time is to buy back the company’s shares through the trading system of Shenzhen Stock Exchange in the form of centralized bidding transaction, and the repurchase price is no more than 70 yuan / share.
Under the condition that the price of repurchased shares does not exceed 70 yuan / share, according to the calculation of the upper limit of repurchased amount of 5 billion yuan, the number of repurchased shares is expected to be no less than 714286 million shares, accounting for about 1.02% of the total issued share capital of the company; According to the calculation of the lower limit of the repurchase amount of RMB 2.5 billion, the number of shares repurchased is expected to be no less than 357143 million shares, accounting for about 0.51% of the total issued share capital of the company.
The company said that this repurchase is mainly based on the confidence in the company’s future development prospects and high recognition of the company’s value, and on the basis of the company’s operation, main business development prospects, the company’s financial status and future profitability, the company decided to continue to repurchase the company’s shares with its own funds, It will continue to be used to implement the company’s equity incentive plan and / or employee stock ownership plan, so as to further improve the corporate governance structure, build an innovative long-term incentive and restraint mechanism for the shareholding of the management team, ensure the realization of the company’s long-term business objectives, promote the consistency of interests and income sharing of all shareholders, and enhance the overall value of the company.
All the shares repurchased will be used to implement the company’s equity incentive plan and / or employee stock ownership plan. If the company fails to use the unused shares for the above purposes within 36 months after the completion of share repurchase, the unused part will be cancelled according to relevant procedures.
Midea Group Co.Ltd(000333) has long been a major A-share repurchases. In 2015, Midea Group Co.Ltd(000333) once offered its first large repurchase plan since listing, with a repurchase amount of 1 billion yuan. Subsequently, since 2018, the company will launch at least one repurchase plan every year. Among them, the planned repurchase in 2018 is no more than 4 billion yuan, the planned repurchase in 2019 is no more than 6.6 billion yuan, and the planned repurchase in 2020 is no more than 5.2 billion yuan. Two phases of repurchase were launched in February and June 2021 respectively. The planned repurchase in the previous phase is no more than 14 billion yuan, and the planned repurchase in the later phase is 2.5 billion yuan to 5 billion yuan. In 2022, with the sharp decline of Midea Group Co.Ltd(000333) share price, the company again threw out a repurchase plan of 2.5 billion yuan to 5 billion yuan.
Eve Energy Co.Ltd(300014) also announced on March 10 that the company plans to use its own funds to buy back some social public shares of the company in the form of centralized bidding transaction for the implementation of employee stock ownership plan or equity incentive. The total capital of this repurchase shall not be less than 150 million yuan and not more than 300 million yuan, the repurchase price shall not exceed 129 yuan / share, and the implementation period of the repurchase shall not exceed 12 months from the date when the board of directors of the company deliberates and approves the share repurchase plan.
On March 9, the leader of communication equipment Zte Corporation(000063) also issued a share repurchase plan. The number of shares repurchased by the company will not exceed the authorized amount of 2% of the issued A-share capital of the company on the date when the proposal is considered and approved by the extraordinary general meeting of shareholders.
In addition, Memsensing Microsystems (Suzhou China) Co.Ltd(688286) , Petpal Pet Nutrition Technology Co.Ltd(300673) , Tonghua Dongbao Pharmaceutical Co.Ltd(600867) , Lionco Pharmaceutical Group Co.Ltd(603669) , Qi An Xin Technology Group Inc(688561) , Beijing Bdstar Navigation Co.Ltd(002151) and other listed companies plan to implement share repurchases with different efforts, and the repurchased shares are basically used for ESOP or equity incentive.
listed companies accelerated repurchase
With the continuous decline of the market, listed companies that have announced the share repurchase plan and are still in the repurchase period have significantly accelerated the repurchase action.
On March 10, Saic Motor Corporation Limited(600104) released the progress of share repurchase. As of March 10, 2022, the company has repurchased 69458700 shares through centralized bidding, accounting for 0.5945% of the total share capital of the company. The highest purchase price is RMB 21.48/share and the lowest purchase price is RMB 16.94/share, The total amount of funds paid was 1.331 billion yuan.
In recent years, Saic Motor Corporation Limited(600104) successively repurchased shares of the company. Just after the repurchase of RMB 2.247 billion was completed in January 2021, the repurchase plan of RMB 1.5 billion ~ 3 billion was released again in September.
On March 2, 2022, Saic Motor Corporation Limited(600104) announced the progress of repurchase, which showed that as of February 28, the number of shares repurchased was 41644000, at a cost of 831 million yuan. The repurchase amount announced on March 10 directly increased to 1.331 billion yuan, which means that the company is accelerating the repurchase of its shares recently. In just a few trading days, it has repurchased 278147 million shares at a cost of 500 million yuan.
The share price of listed companies rebounded strongly recently due to the overweight repurchase of listed companies. On March 9, Saic Motor Corporation Limited(600104) hit a new low of 16.9 yuan at the stage, and rebounded sharply. On March 10, the share price rose again by 1.8%, and the share price rebounded to above 18 yuan.
In addition, Keming noodle industry, Ningbo Water Meter (Group) Co.Ltd(603700) , Greattown Holdings Ltd(600094) , Zhejiang Dali Technology Co.Ltd(002214) , Insigma Technology Co.Ltd(600797) , Zhejiang Shengyang Science And Technology Co.Ltd(603703) , etc. announced the repurchase progress on the 10th.
On March 9, a number of companies announced the progress of share repurchase, including S.F.Holding Co.Ltd(002352) , Hangzhou Star Shuaier Electric Appliance Co.Ltd(002860) , Arts Group Co.Ltd(603017) , Guangdong Liantai Environmental Protection Co.Ltd(603797) , Fujian Foxit Software Development Joint Stock Co.Ltd(688095) , Shandong Bohui Paper Industry Co.Ltd(600966) , Shanghai Golden Bridge Infotech Co.Ltd(603918) , Hangzhou Haoyue Personal Care Co.Ltd(605009) , etc.
Among them, S.F.Holding Co.Ltd(002352) announced that as of March 9, the company had repurchased 103266 million shares in total, with a repurchase fund of about 565 million yuan, the number of repurchased shares accounted for about 0.21% of the total shares, and the average transaction price was 54.72 yuan / share.
On March 3, the company just announced a repurchase plan of 1 billion yuan to 2 billion yuan. As of March 9, it had repurchased 565 million yuan, with a faster repurchase speed.
According to statistics, since the beginning of this year, a number of companies have bought back the company’s shares on a large scale, and 14 companies with a repurchase amount of more than 500 million yuan have been listed, including Baoshan Iron & Steel Co.Ltd(600019) repurchase amount of nearly 3.6 billion yuan and Boe Technology Group Co.Ltd(000725) repurchase cost 2.62 billion yuan. Both companies have completed the repurchase The repurchase of Saic Motor Corporation Limited(600104) , Glodon Company Limited(002410) , 360 Security Technology Inc(601360) , S.F.Holding Co.Ltd(002352) and other companies is still in progress.
Hong Kong share repurchase is also overweight
Affected by multiple internal and external factors, many stocks in the Hong Kong stock market were hit hard, and the decline of related stocks in the Internet, education, real estate and other sectors was more obvious. However, as the new economic valuation of Hong Kong stocks fell to a relatively low historical level, the stock repurchase behavior of Hong Kong listed companies began to increase significantly.
In 2022, Tencent holdings restarted the repurchase on January 5 and conducted 11 repurchase operations, with a total repurchase amount of HK $2.2 billion. In addition to Tencent, Yaoming biology, Xiaomi group and HengAn international have also made frequent repurchases this year.
It is worth mentioning that, in addition to companies with more traditional buybacks and new economy companies with large declines, some state-owned enterprises have also started buybacks in the Hong Kong stock market. At the beginning of this year, China Mobile announced on the Hong Kong stock exchange that the shareholders of the company authorized the board of directors to repurchase no more than 2 billion Hong Kong shares on the Hong Kong Stock Exchange at the annual general meeting on March 26, 2021, equivalent to no more than 10% of the number of Hong Kong shares issued on that day.
In addition, China Telecom Corporation Limited(601728) also issued the suggestive announcement on the conditions for triggering the measures to stabilize the stock price, referring to the plan to stabilize the stock price by using share capital changes such as repurchase and shareholding increase.
China International Capital Corporation Limited(601995) believes that the management of the company has a better understanding of its own reasonable value and growth potential than public investors. Therefore, stock repurchase is usually regarded as a sign of increased confidence in the stock price or the company’s prospects.
From the historical experience, China International Capital Corporation Limited(601995) said that the increase of stock repurchase may mean that the market value gradually appears. Stock repurchase is often a bottom signal of the medium-term market and provides support for the medium-term performance of relevant stocks.
