Since the beginning of the year, both A-shares and Hong Kong stocks have continued the momentum of share repurchases. Wind data shows that as of January 11, more than 50 A-share listed companies disclosed new progress in repurchases such as shareholder proposals, board plans, and shareholders' general meeting approvals, and nearly 70 Hong Kong-listed companies repurchased, with a total repurchase amount of more than HK$9 billion. Among the many buybacks, the number of people who chose to write off their shares has increased. Huafu Securities Research Report believes that buybacks can promote the rise in stock prices. The active and rational use of share repurchase tools by listed companies is conducive to boosting investor confidence, promoting the smooth operation of the capital market, and laying a good foundation for building a long-term mechanism in the capital market.
The momentum of A-share buybacks continues unabated The number of repurchase cancellators is gradually increasingAccording to Wind data, on January 11, 15 companies issued announcements related to share buybacks. Among them, 4 companies disclosed the stock repurchase board plan, 2 companies had their repurchase plans approved by the general meeting of shareholders, 5 companies disclosed the progress of the implementation of share repurchases, and 4 companies disclosed that the implementation of the repurchase plans had been completed.
As of January 11, the number of listed companies that have disclosed announcements related to share buybacks in 2024 has approached 400, of which 53 companies have appeared at key new nodes such as shareholder proposals, board plans, and shareholders' meeting approvals.
Judging from the number of announced repurchases, among the above-mentioned "new" companies that disclose share repurchases, Hualian Holdings, Hisense Home Appliances and other 7 companies plan to repurchase more than 10 million shares, based on the lower limit of the announced repurchase amount, Huayou Cobalt, No. 9 Company, Hisense Home Appliances and other 6 companies exceed 100 million yuan, and the lower limit of the overall repurchase amount of 53 companies is about 2 billion yuan.
From the perspective of the purpose of repurchase, the number of repurchase cancellators is gradually increasing. Among the above-mentioned enterprises, there are 30 companies to repurchase for the purpose of equity incentive cancellation, such as Huatai Securities, the company disclosed on January 9 that it will cancel 45,278,500 shares deposited in the company's repurchase special securities account on January 10, according to the closing price of 13.47 yuan per share on January 9, the corresponding market value is 610 million yuan. Huayou Cobalt is also a "large player" in the cancellation of equity incentives, involving more than 12 million shares, corresponding to an amount of more than 400 million yuan.
In addition to the cancellation of equity incentives, there are also 4 companies that will repurchase shares and directly cancel them for market value management.
Huafu Securities Research Report believes that buybacks can promote the rise in stock prices. On the one hand, listed companies can directly increase the demand for the company's shares by repurchasing shares to increase the stock price, which is also the most direct channel for the impact of share repurchases. On the other hand, buybacks can promote the improvement of financial indicators such as EPS and ROE of listed companies, and these indicators are an important basis for measuring the fundamentals of listed companies in the investment research system.
With the continuous improvement of the policy system and the continuous improvement of the importance of repurchase, more and more A-share listed companies will actively and rationally use share repurchase tools in the future, which is also conducive to boosting investor confidence, promoting the smooth operation of the capital market, and laying a good foundation for building a long-term mechanism in the capital market.
The reporter noted that on January 11, a number of companies that had recently disclosed the repurchase of the "board plan" or "approved by the general meeting of shareholders" achieved a rise in stock prices, and Xinrui shares and No. 9 companies rose by more than 3%.
Major Internet companies led the Hong Kong stock buyback Meituan's first buyback cost nearly HK$400 millionOn the evening of January 10, Meituan announced that the company repurchased 5.63 million Class B shares on the same day, costing nearly HK$399 million. Based on the repurchase amount, the average price of Meituan's repurchase is about HK$71.
Before the market opened on the morning of November 29, 2023, Meituan announced that from December 1, it will repurchase shares in the open market from time to time with a total amount of no more than $1 billion in accordance with the repurchase authorization approved at the shareholders' meeting on June 30, 2023. Meituan's board of directors believes that the share buyback is a demonstration of the company's confidence in its business outlook and prospects. The Company's existing financial resources are sufficient to support share buybacks while maintaining a healthy financial position.
Meituan's buyback is a microcosm of the recent wave of buybacks in Hong Kong, with nearly 70 companies repurchasing since the beginning of the year, with a total repurchase amount of more than HK$9 billion, according to Wind data. As of January 11, Tencent Holdings has repurchased more than 5.5 billion Hong Kong dollars, accounting for more than half of the overall repurchase amount, while last year, Tencent Holdings repurchased 48.429 billion Hong Kong dollars, accounting for 38.46% of the total repurchase in the Hong Kong stock market.
In addition to Tencent Holdings, Xiaomi Group and Kuaishou are also the main players in repurchases, with the former having repurchased nearly HK$400 million and the latter repurchasing more than HK$130 million.
Behind the frequent repurchases, it is inseparable from the declining valuation of the Hong Kong stock market. Since 2023, affected by factors such as the Federal Reserve's interest rate hike, the Hong Kong stock market has shown a downward trend as a whole. Heading into 2024, the Hang Seng Index and the Hang Seng Tech Index as a whole are still in falling territory.
Haitong Securities pointed out that at the beginning of the Hong Kong stock buyback wave, the market has often fallen sharply, and the valuation has also reached a low level, and with the market falling further and the valuation has fallen further, the repurchase efforts have also continued to increase. When Hong Kong stock buybacks surged, the Hang Seng Index was in the bottom area and was close to an upward inflection point.
On January 11, Meituan opened higher, with an intraday rise of 7.39%, and finally closed up 5.37%, the largest one-day increase in nearly a month.
CICC expects that based on the assumption of gradual policy advancement and a gradual decline in U.S. bond interest rates, Hong Kong stocks are in the process of gradually bottoming out, with an upside of 10%-15% in the baseline scenario.