Recently, listed companies have witnessed a "buy back boom". Wind data shows that from May 1 to 21, 2024, 705 listed companies have implemented buybacks during this period, and the number has soared, far exceeding 155 in the same period last year. As of May 21, press releases, 83 companies have issued stock repurchase related announcements on that day. Among them, 10 companies disclosed their share repurchase plans for the first time, 41 companies' repurchase plans were approved by the shareholders' meeting, 7 companies disclosed the implementation progress of share repurchase, and 25 companies' repurchase plans have been completed.
Among the listed companies that have recently issued repurchase proposals, there are many leading enterprises in the industry. On May 20, Yili Shares held the 2023 Annual General Meeting of Shareholders, which deliberated and passed a number of proposals including the Proposal on the Scheme of Repurchasing the Company's Shares by Centralized Bidding Trading (hereinafter referred to as the Repurchase Proposal). According to the repurchase proposal, Yili Shares will buy back company shares of no less than 1 billion yuan and no more than 2 billion yuan at a price of no more than 41.88 yuan/share within 12 months from now. The repurchased shares will be completely cancelled and the registered capital of the company will be reduced.
Judging from the situation this year, taking the latest announcement date as the statistical standard, Wind data shows that as of May 21, a total of 2303 companies in the A-share market have issued repurchase plans or implemented repurchase within the year, with the repurchase amount of about 143.92 billion yuan and the announced repurchase amount of about 270.417 billion yuan. The number of listed companies participating in repurchase in the same period last year was more than 1200.
From the perspective of repurchase amount, according to Wind statistics, 14 listed companies have implemented repurchase of more than 1 billion yuan this year, such as Midea Group has repurchased 8.664 billion yuan, Gree Electric Appliance has implemented repurchase of about 3 billion yuan, Rongsheng Petrochemical has implemented repurchase of about 2.992 billion yuan, etc. There are 296 repurchases with the implementation amount of more than 100 million yuan; There are 1267 listed companies with the implementation amount of more than 10 million yuan, accounting for more than 50%.
In the repurchase plan, there are also large amount repurchases at the level of more than 10 million. For example, among the listed companies that disclosed the repurchase plan on May 21, a total of 8 companies' share repurchase plan amounts to more than 10 million yuan. The repurchase plan amount of Hengfeng Tools, Bomaike and Fumiao Technology is the highest, with the proposed repurchase amount not exceeding 100 million yuan, 80 million yuan and 50 million yuan respectively. From the perspective of the whole year, Midea Group announced a repurchase amount of 14 billion yuan, and 47 listed companies, including Tongwei, SAIC Group and Ningde Times, announced a repurchase amount of more than 1 billion yuan.
As a basic institutional arrangement in the capital market, share repurchase has the functions of optimizing the capital structure, maintaining the investment value of the company, and improving the return mechanism of investors. In recent years, the CSRC has continuously optimized the share repurchase system, supported more listed companies to stabilize share prices through share repurchases, maintained shareholders' rights and interests, and consolidated the foundation for stable market operation. At the end of last year, the Rules on Share Repurchase of Listed Companies were revised and released, encouraging listed companies to use repurchase tools in accordance with law and regulations and actively return to investors.
Among them, the repurchase of central state-owned enterprises is also worth noting. In May 2022, the State owned Assets Supervision and Administration Commission of the State Council issued the Work Plan for Improving the Quality of Listed Companies Controlled by Central Enterprises, proposing to explore the integration of value realization into the performance evaluation system of listed companies. But at present, only some listed companies of central enterprises have carried out relevant practices, and no hard assessment mechanism has been formed. At the end of January this year, Xie Xiaobing, the head of the State owned Assets Supervision and Administration Commission of the State Council, said that he would further study the inclusion of market value management in the performance assessment of the heads of central enterprises.
Industry insiders said that the repurchase of listed companies would help maintain the investment value of enterprises, stabilize share prices and enhance investors' confidence in enterprises. When the stock price is undervalued, the listed company can boost the stock price through repo, and at the same time send a signal to the market that the company cares about shareholders' equity. In addition, share repurchases can also be used as future financing or employee benefit plans. At the same time, when the market valuation is relatively attractive, the cancellation repurchase will improve the earnings per share and shareholders' equity, and also play a role in optimizing the equity structure.
