Since March, the team of listed companies repurchasing shares has grown day by day, gradually building a “fence” of market confidence. Compared with the direct use of self owned funds for repurchase, many companies also try to use more innovative and market-oriented forms of financing to repurchase company shares. On March 17, China Molybdenum Co.Ltd(603993) , Polaris Bay Group Co.Ltd(600155) , Shanying International Holdings Co.Ltd(600567) , Southern Publishing And Media Co.Ltd(601900) , Southern Publishing And Media Co.Ltd(601900) .
“bond issuance” repurchase is favored by the company
China Molybdenum Co.Ltd(603993) is the most ambitious. It plans to publicly issue corporate bond financing plans to professional investors, with a scale of no more than 10 billion yuan. Among them, some of the funds are intended to be used to buy back the company’s shares, which will be used to implement equity incentive and employee stock ownership plan in the future.
China Molybdenum Co.Ltd(603993) relevant person in charge said in an interview with the reporter of Shanghai Securities News that on the one hand, the bond issuance financing is used for share repurchase, which is convenient for the implementation of equity incentive in the future, so as to deeply bind the management and other employees with the company and realize the win-win development of the company and individuals; On the other hand, it is used to speed up the project construction and create more benefits for the company.
The reporter noted that China Molybdenum Co.Ltd(603993) just completed the phase I share repurchase program in mid December last year before the “bond issuance” repurchase. According to the repurchase plan, the company plans to use its own funds of no more than 800 million yuan to repurchase 50-100 million shares. As of December 17, the company has completed the repurchase, with a total repurchase of about 100 million shares, accounting for 0.46% of the total share capital of the company. The average repurchase price is 6.84 yuan / share, and the total transaction amount is 684 million yuan.
“Through the ‘bond issuance’ repurchase, we hope to continue to maintain the benign interaction between the company and the capital market and achieve better development in the future.” China Molybdenum Co.Ltd(603993) the person in charge said.
On the same day, Polaris Bay Group Co.Ltd(600155) announced that it planned to buy back the company’s shares with no more than 400 million yuan, and the source of funds was legally raised funds such as issuing corporate bonds. “The source of funds for ‘bond issuance’ repo is incremental funds, which will not affect the company’s original business plan and capital arrangement and has higher flexibility. In view of the recent market fluctuations, the company’s launch of the repo plan at this time also conveys confidence in the company’s fundamentals and future development prospects to the market, and can also reflect the company’s social responsibility and responsibility.” Polaris Bay Group Co.Ltd(600155) told reporters.
In addition, Shanying International Holdings Co.Ltd(600567) , Southern Publishing And Media Co.Ltd(601900) also catch up with the tide of “bond issuance” repo Shanying International Holdings Co.Ltd(600567) it is planned to repurchase the company’s shares by RMB 250500 million. Based on the calculation of the upper limit of the total repurchase fund of RMB 500 million and the upper limit of the repurchase price of RMB 3.7/share, the number of shares to be repurchased is expected to be 135 million, accounting for about 2.93% of the company’s total share capital. The sources of funds for this repurchase are the company’s own funds and the funds raised from the issuance of corporate bonds. Similarly, Southern Publishing And Media Co.Ltd(601900) plans to repurchase shares at a price of no more than 12 yuan / share, with a repurchase fund of 80 million yuan to 160 million yuan.
Compared with the simple repurchase with its own funds, what new signal does the “bond issuance” repurchase convey? Some market participants pointed out to reporters that the asset liability ratio of the “bond issuance” repurchase company is not high, and the debt pressure is not large, which meets the necessary conditions for bond issuance. This kind of repurchase seems to use financial leverage and pay a certain cost, but in fact, it sends a signal to the market that the company’s current share price is undervalued and optimistic about the company’s future development, which plays a role in the release of the company’s value.
In addition, the advantages of the exchange’s bond issuance platform also increase the attractiveness of “bond issuance” repo. According to statistics, in 2021, the three-year and five-year weighted average coupon rates of AAA corporate bonds issued by the Shanghai Stock Exchange were 13 BP and 9 BP lower than the medium-term notes of the same period, respectively From this perspective, the interest rate of bonds issued through the platform of the exchange is lower than the average level of the market, which can effectively reduce the overall debt cost of the company.
domineering repo is inseparable from “hard gas” operation
In fact, “bond issuance” repurchase is also the embodiment of the company’s “self-confidence”. The overbearing repurchase of listed companies with “real gold and silver” is inseparable from the support of “hard” operation.
China Molybdenum Co.Ltd(603993) is one of the world’s largest producers of scheelite and the second largest producer of cobalt and niobium. It is also the world’s top seven molybdenum producers and leading copper producer. On March 17, the company disclosed the business data from January to February 2022. From January to February this year, the company seized the favorable opportunity of the market and went all out to stabilize and increase production. The output of main products copper, cobalt and niobium increased by 20%, 52% and 42% respectively year-on-year; At the same time, benefiting from the year-on-year increase in the sales prices of all products, the company’s main business indicators were better than expected and achieved a good start of the year.
China Molybdenum Co.Ltd(603993) person in charge told reporters, “the company plans to use part of its funds for share repurchase, which comes from our full confidence in the company’s future, the capital market and China’s economy.” He admitted that the company currently has sufficient cash flow and bank credit. In order to further meet the company’s project construction, optimize the debt structure and reduce the financing cost, after comprehensively analyzing the macro environment and capital market at home and abroad, the company believes that the domestic bond market is one of the company’s first financing channels. To this end, the company plans to issue 10 billion corporate bond financing plan.
“In order to attract and retain managers with international vision and modern enterprise management ability, experts with core technology and highly skilled talents, the company has been improving various effective mechanisms, including business incentives, equity incentives, immediate incentives, long-term incentives and so on.” The person in charge said that according to the repurchase plan, China Molybdenum Co.Ltd(603993) in the future, it will timely launch follow-up employee stock ownership plans and other stock ownership and incentive plans.
Polaris Bay Group Co.Ltd(600155) the confidence in the market prospect also comes from the continuous and stable business situation. In 2021, the company expects to achieve a total operating revenue of 3.77 billion yuan, a year-on-year increase of 16.02%, and a net profit attributable to shareholders of listed companies of 972 million yuan, a year-on-year increase of 47.62%. The performance growth was mainly due to the substantial growth of the company’s wealth management business, fund warehouse business and interest income over the previous year.
According to the reporter’s preliminary statistics, from March 7 to 17, Shanghai stock exchange companies have issued about 110 announcements related to repurchase and shareholding increase, of which the number of share repurchases is as high as 67. In the face of the market downturn and investors’ hesitation, listed companies continue to show their sincerity and confidence to the market with practical actions.
