Under the policy support, the arrival of “market bottom” is only a matter of time.
On the night of April 11, the CSRC, the SASAC of the State Council and the all China Federation of industry and Commerce jointly put forward 12 practical measures to support the development of listed companies and maintain the stability of the capital market. In particular, the notice proposes to encourage major shareholders and directors, supervisors and senior executives to hold shares of listed companies for a long time, and actively stabilize the stock price by increasing their shares when the company’s shares fall sharply.
As soon as the voice dropped, several listed companies including Gongniu Group Co.Ltd(603195) ( Gongniu Group Co.Ltd(603195) . SH), Shanghai Bairun Investment Holding Group Co.Ltd(002568) ( Shanghai Bairun Investment Holding Group Co.Ltd(002568) . SZ) Luxshare Precision Industry Co.Ltd(002475) ( Luxshare Precision Industry Co.Ltd(002475) . SZ) issued repurchase announcements overnight.
A-share repurchase boom hit. According to the data, from January to April 12, 2022, more than 400 listed companies have implemented repurchase, with a total repurchase of more than 2.3 billion shares and a total repurchase amount of 26.6 billion yuan. The total repurchase amount of 60 listed companies exceeded 100 million yuan. There are signs of repeating the “repurchase tide” of A-share listed companies in 2018.
Shenwan Hongyuan Group Co.Ltd(000166) chief market expert GUI Haoming told the reporter of times weekly that the notice issued by the CSRC and other three departments at the current special node has released two signals: first, we hope to improve the quality of listed companies, so that the market can have a good foundation for operation; Second, we hope to stabilize the market and encourage listed companies to repurchase shares to boost market confidence.
“Many reasons lead to the decline of the stock market. We should take various measures. The most fundamental thing is to improve the performance of listed companies.” GUI Haoming said that at present, the market is at the bottom stage. “With the end of the policy, the bottom of the market may not come right away.”
After yesterday’s shock and decline, on April 14, the performance of A-share market was uneven: the Shanghai Composite Index and Shenzhen composite index were red, closing at 322564 points and 1171462 points respectively, with an increase of 1.22% and 1.27%; The gem index fell slightly by 0.02% to 246629P align = “center” support A-Shares
The three departments jointly issued a notice pointing out that listed companies are encouraged to repurchase shares for equity incentive and employee stock ownership plans; Support eligible listed companies to buy back in order to stabilize the stock price; Support listed companies to raise funds through issuing preferred shares, bonds and other channels and implement share repurchase according to law.
This scene is comparable to 2018. That year, the regulatory authorities issued a number of favorable policies to support it. On October 26, 2018, the new repurchase regulations were implemented; On November 9, the CSRC, the Ministry of Finance and the state owned assets supervision and Administration Commission of the State Council jointly issued the opinions on supporting the repurchase of shares by listed companies, which further refined the regulatory requirements for the repurchase of shares by listed companies, basically clarified the “protection type” repurchase standard, relaxed the repurchase of financial listed companies, and offered “preferential treatment” for the refinancing after the repurchase.
Two months after the release of the new regulations, the number of listed companies that issued repurchase plans for A-Shares surged, giving birth to a wave of repurchase.
According to the data, a total of 785 A-share listed companies implemented repurchase in 2018, accounting for 22% of the total number of listed companies, with a total repurchase amount of 53.425 billion yuan, an increase of 575% year-on-year Midea Group Co.Ltd(000333) ( Midea Group Co.Ltd(000333) . SZ) became the king of repurchase in 2018, with a repurchase amount of about 4 billion yuan. A total of 639 private holding listed companies implemented repurchase, accounting for more than 80%.
The notice also stressed that all kinds of market subjects should be treated equally, no additional conditions and invisible thresholds should be set, and a market environment of fair competition should be created. We will support private enterprises in listing and financing, mergers and acquisitions, improve the bond financing support mechanism for private enterprises, stimulate the vitality and creativity of private enterprises, and promote the high-quality development of private listed companies.
The circular also requires that the SASAC, in accordance with the principle of facilitating enterprises, actively guide and support the share repurchase and cash dividends of state-controlled listed companies, and guide state-controlled listed companies to become an example of promoting the stable development of the capital market. The state-owned shareholders of listed companies should be active and responsible shareholders, actively increase their holdings of shares of listed companies with undervalued value, and support listed companies to implement share repurchase and cash dividends.
Li Jin, chief researcher of China Enterprise Research Institute, believes that after the SASAC gives further support, it is expected that the listed companies of state-owned enterprises will take practical actions soon. Share repurchases, cash dividends and mergers and acquisitions are the three major measures taken by state-owned listed companies to stabilize the capital market. After the SASAC clearly guides and supports the direction, it is expected that the above measures will be more fully used in the follow-upP align = “center” listed companies “fancy” large-scale repurchase
After four years, the A-share repurchase tide repeated.
According to wind data, as of April 12, more than 400 listed companies had implemented repurchase plans during the year, with a total repurchase amount of 26.6 billion yuan. The repurchase boom continues. On April 11, when the notice was issued, nine listed companies issued repurchase announcements.
From December 12 to April 13, April 12 to April 13 from April 12 to April 13, April 12 to April 13, April 13, April 12 to April 13, April 13, April 12 to April 13, Sanan Optoelectronics Co.Ltd(600703) ( Shenzhen Farben Information Technology Co.Ltd(300925) . SZ) and other listed companies have successively issued repurchase announcements Sanan Optoelectronics Co.Ltd(600703) plans to buy back shares of 500800 million yuan and Saturday Co.Ltd(002291) plans to spend 150300 million yuan to buy back shares. Most of the shares repurchased by the company will be planned to be used for employee stock ownership plan or equity incentive.
Midea Group Co.Ltd(000333) the proposed repurchase amount of this round is 2.5-5 billion yuan. At present, 579 million yuan has been spent on repurchase, but it is not the king of repurchase Ping An Insurance (Group) Company Of China Ltd(601318) ( Ping An Insurance (Group) Company Of China Ltd(601318) . SH) previously announced that it planned to use no less than 5 billion yuan and no more than 10 billion yuan for repurchase. As of the end of March this year, it had spent 3.899 billion yuan for repurchase.
For the reasons of repurchase, many listed companies believe that the current stock price can no longer reflect the value of the company He Bei Cheng De Lolo Company Limited(000848) said that in view of the recent large fluctuations in the secondary market, based on the confidence in the sustainable and stable development of the company in the future and the recognition of the company’s value, it is planned to adopt the form of share repurchase cancellation to reduce the registered capital, so as to promote the reasonable return of the company’s stock market price to the company’s internal value.
Shandong Jinjing Science And Technology Stock Co.Ltd(600586) said bluntly that the current stock price of the company failed to reflect the long-term value and good asset quality of the company, which affected the market image of the company. A number of listed companies said that the share repurchase was based on confidence in the future development of the company and a high recognition of the value of the company.
Dong Dengxin, director of the Institute of Finance and securities of Wuhan University, told the times that listed companies generally choose to repurchase shares in three situations: first, the company has a large amount of idle funds; second, it plans to make equity incentive plans or employee stock ownership plans; third, the company believes that the current stock price is seriously low, and repurchase is conducive to improving the stock price.
From the source of repurchase funds, in addition to using its own funds, the use of over raised funds for repurchase and “bond issuance” repurchase has become a major feature of the repurchase tide of A-share listed companies this year.
China Molybdenum Co.Ltd(603993) and Polaris Bay Group Co.Ltd(600155) adopted the method of issuing corporate bonds for repurchase, while Shanying International Holdings Co.Ltd(600567) , Southern Publishing And Media Co.Ltd(601900) adopted the method of “own funds + issuing corporate bonds” for repurchase Hangzhou Arcvideo Technology Co.Ltd(688039) , Sansure Biotech Inc(688289) , Appotronics Corporation Limited(688007) , Genew Technologies Co.Ltd(688418) , Zwsoft Co.Ltd(Guangzhou)(688083) and other listed companies on the science and innovation board use over raised funds to repurchase the company’s shares.
In addition, major shareholders and executives of many listed companies also increased their holdings. Since March, a total of 56 companies have disclosed the announcement of the shareholding increase plan of shareholders or directors, supervisors and senior executives. More than 10 listed companies have an upper limit of 100 million yuan.
Among them, Wang Laisheng, one of the actual controllers of fruit chain leader Luxshare Precision Industry Co.Ltd(002475) and vice chairman, plans to increase the holdings by no less than 200 million yuan and no more than 400 million yuan Xing boyue, the actual controller of Ginwa Enterprise (Group) Inc(600080) ( Ginwa Enterprise (Group) Inc(600080) . SH), plans to increase the holding of no less than 8.65 million shares and no more than 17.3 million shares, accounting for 2.32% – 4.63% of the total share capital of the company Henan Yicheng New Energy Co.Ltd(300080) ( Henan Yicheng New Energy Co.Ltd(300080) . SZ), the controlling shareholder of China Pingmei Shenma Group, plans to increase its holdings by no less than 100 million yuan and no more than 300 million yuan He Yongzheng, the actual controller, chairman and general manager of Xiangyumedicalco.Ltd(688626) ( Xiangyumedicalco.Ltd(688626) . SH), plans to increase the total holdings by no less than 10 million yuan and no more than 20 million yuan.
“The increased holdings of major shareholders and directors are intended to convey confidence to the market and release the signal of long-term optimistic about the development of the company.” Hao Guiming said.
