Perhaps the bottom of the market is right ahead?, More than 50 listed companies have joined the repurchase army, triggering a new round of "repurchase restrictions" on A-shares | repurchases | listed companies
In recent days, there has been a frenzy of repurchase in A-shares!
On the evening of August 21st, multiple listed companies joined the repurchase army. Among them, Rongsheng Petrochemical, a private petrochemical giant with a market value of 100 billion yuan, plans to invest no more than 2 billion yuan in repurchase, Guanglian Da, a leading construction information technology company, plans to repurchase its shares for 300 million to 500 million yuan, and Foxin Software, an AI concept stock, also plans to repurchase its shares.
Statistics show that from the evening of August 17th to the evening of August 21st, more than 50 listed companies have planned to use real money and silver to repurchase shares from the secondary market.
The wave of repurchase by listed companies is an important measure to boost market confidence. Several securities analysts have stated that looking back at history, the "repurchase boom" of A-shares has been closely intertwined with the "market bottom". The opening of a new round of "repurchase boom" in A-shares indicates that the "market bottom" may be ahead.
More than 50 listed companies plan to repurchase shares
On the evening of the 21st, with companies such as Rongsheng Petrochemical, Guanglian Da, Fuxin Software, Zhichun Technology, Chuangye Huikang, Fujie Environmental Protection, and Xiangsheng Medical joining the buyback army, the number of A-share companies that announced their share buybacks in recent days has increased to more than 50.
On the evening of August 21st, Rongsheng Petrochemical announced that, based on its confidence in the company's future development prospects and recognition of its long-term value, in order to enhance investor confidence, promote a reasonable return of the company's stock price to its long-term intrinsic value, and promote stable and sustainable development, it has decided to repurchase some of the company's shares.
Rongsheng Petrochemical plans to repurchase no less than 1 billion yuan and no more than 2 billion yuan, with a repurchase price of no more than 18 yuan per share. The funds for this repurchase come from the company's own or self raised funds, and the repurchased shares will be used to convert convertible corporate bonds or employee stock ownership plans issued by the listed company. In the secondary market, Rongsheng Petrochemical has experienced a cumulative decline of over 22% since April this year, with the latest stock price of 11.6 yuan per share and a market value of 117.5 billion yuan.
On the same evening, Guanglian Da also released a share buyback plan. Guanglian Da stated that in order to further improve the company's long-term incentive mechanism and promote healthy and long-term development, the company plans to use its own funds to repurchase some shares for equity incentive plans or employee stock ownership plans. The total amount of funds for this repurchase shall not be less than 300 million yuan and not exceed 500 million yuan, and the repurchase price shall not exceed 45 yuan per share.
In addition, Fuxin Software disclosed that Xiong Yuqian, the controlling shareholder, actual controller, chairman and president of the company, proposed to repurchase shares for RMB 15-30 million based on his confidence in the company's future sustainable development and recognition of the company's value, with a repurchase price not exceeding RMB 120 per share. It is worth noting that Foxit Software is an AI giant stock that surged nearly 280% from January 1st to June 20th this year, but its stock price has fallen 47.5% in the past two months.
Statistics show that from the evening of August 17th to the evening of August 21st, more than 50 listed companies have planned to repurchase their shares. Among them, companies such as Rongsheng Petrochemical, Guanglian Da, Dongfang Risheng, Huaxi Biotechnology, Daquan Energy, and Naxin Micro plan to repurchase more than 100 million yuan.
Institution: "Market Bottom" Perhaps Ahead
Share repurchase can not only demonstrate the company's confidence in future development, but also enhance investor sentiment. In recent years, the China Securities Regulatory Commission has encouraged and supported listed companies in various aspects to carry out share repurchases, and the overall scale of repurchase in the A-share market has steadily increased.
On August 18th, the China Securities Regulatory Commission emphasized that the next step will be to work with relevant parties to further optimize the share repurchase system, support more listed companies to stabilize and boost stock prices, safeguard shareholder rights, and consolidate the foundation of stable market operation through share repurchase. On the one hand, we will accelerate the revision of repurchase rules, relax the repurchase conditions for listed companies in the event of a significant drop in stock prices, relax the repurchase restrictions for newly listed companies, relax the restrictions on the repurchase window period, and improve the convenience of implementing repurchases. On the other hand, encourage eligible listed companies to actively carry out repurchases, urge listed companies that have already issued repurchase plans to accelerate the implementation of repurchase plans, increase repurchase efforts, and timely convey positive signals.
Statistics show that since the beginning of this year, the number of share repurchase plans released by A-share listed companies has approached the total amount of last year, and the intensive release of repurchase plans in the past week is also expected to boost confidence.
CITIC Securities stated that repurchase is an important way of counter cyclical capital operation, and the surge of repurchase by listed companies is an important measure to boost market confidence, which is expected to help the market stabilize and strengthen. CITIC Securities pointed out that the significant increase in quantity this year is also due to the further relaxation of the repurchase policy. In October 2022, the China Securities Regulatory Commission issued the revised "Rules for Share Repurchase of Listed Companies", which further improved the convenience of share repurchase and increase in listed companies from four main aspects: repurchase conditions, repurchase restrictions for newly listed companies, repurchase window period, and restriction intervals when repurchase and refinancing intersect, giving listed companies greater flexibility and autonomy in repurchase. At the same time, the Shanghai and Shenzhen Stock Exchanges have also revised the guidelines for share repurchase and share change management, and publicly solicited opinions from the public.
CITIC Securities pointed out that in history, the repeated "repurchase boom" has often been closely related to the subsequent "market bottom". Since 2015, the A-share market has gone through four rounds of large-scale buybacks by listed companies. According to the observation of the trend of the Wanda All A Index, these repurchase trends have all appeared in the bottom range of the market, highlighting the correlation between the "repurchase trend" of A-shares and the "market bottom".
Huafu Securities also stated that with the intensive introduction of policies after the July Politburo meeting, the current situation of "policy bottom" has emerged, and the start of the A-share "repurchase tide" indicates that the "market bottom" may be ahead. Founder Securities also pointed out that the "repurchase boom" of A-shares can further consolidate the "market bottom".
