Frequent Increase in A-Shares Repurchase
This year, both the amount of share buybacks and cash dividends of listed companies have reached historical highs, and the ranks of companies and shareholders applying for special loans for share buybacks and increases continue to expand.
Market insiders believe that the frequent record-breaking share buybacks and increased actions in the A-share market this year reflect a significant enhancement in the awareness of listed companies to enhance investment value and carry out market value management. At the same time, the acceleration of the policy on re-lending for share buybacks and increases has also motivated the relevant parties to make good use of the tools for share buybacks and increases, to strengthen investor confidence, enhance the inherent stability of the market, and jointly maintain the healthy and stable development of the capital market.
The list of buybacks continues to lengthen.
Recently, the list of A-share companies buying back shares has continued to lengthen, showing characteristics of large scale, high frequency, and a large number of "cancellation-style buybacks". Kejie Intelligent announced on November 21 that the company plans to buy back A-shares worth no less than 150 million yuan (inclusive) and no more than 300 million yuan (inclusive) through centralized bidding transactions, for cancellation and reduction of the company's registered capital.
Advertisement
When it comes to the consideration of share buybacks, many listed companies have stated that this is based on a good expectation of the company's future development prospects and a high recognition of the company's value. It is a choice made to protect the interests of the majority of investors, enhance investor confidence, promote the reasonable return of the company's stock price to the company's long-term intrinsic value, and maintain the company's value and shareholder rights.
Huafu Securities believes that the increase in the intensity of share buybacks by listed companies can not only bring incremental funds to the market and improve liquidity but also help to convey positive signals and boost investor confidence.
It is worth mentioning that multiple share buybacks in a year have gradually become a trend. WuXi AppTec has completed 3 share buybacks this year, and all the bought-back shares have been canceled.
The market expects that in the future period, the craze for share buybacks by listed companies will continue. "Whether it is stock buybacks or increasing dividend efforts, the trend of China's stock market to strengthen market value management is obvious." The chief China equity strategist of Goldman Sachs said that, thanks to policy benefits such as re-lending for share buybacks and increases, the total amount of share buybacks by listed companies in 2025 may double compared to 2024.
Important shareholders actively increase their holdings.
While increasing the intensity of buybacks, many listed companies have also recently released important shareholder increase plans.
Rongsheng Petrochemical said that since 2024, the company's controlling shareholders have launched two increase plans. The first increase plan has been implemented, with an increase amount of 1.188 billion yuan. The second increase plan has a scale of 500 million yuan to 1 billion yuan and is currently being implemented. So far, the total increase amount of the two plans has reached 1.693 billion yuan.
"The company has always attached great importance to shareholder returns and has paid dividends for 14 consecutive years. The company will take improving the company's quality as the foundation, do a good job in market value management according to the law, and further enhance the company's investment value and shareholder return ability." Rongsheng Petrochemical said.
Some companies play a "combination of buybacks and increases" to guide the company's stock price to return to a level that matches its intrinsic value. On the evening of November 22, Jintian Shares announced that the company plans to use special loans and its funds of 100 million yuan to 200 million yuan to buy back shares, and the purpose of the buyback is to convert the company's convertible bonds, with a buyback price not exceeding 8.61 yuan per share. On the same day, Jintian Shares announced that the company's controlling shareholder Jintian Investment, the actual controller Lou Cheng and its consistent action person Lou Jingjing plan to increase the company's shares within the next 12 months, with total of increase amount of not less than 88 million yuan and not more than 142 million yuan.
A researcher at the Research Institute of the Bank of China believes that the recent active and intensive increases by important shareholders of listed companies fully demonstrate the recognition of the investment value of listed companies, have formed a demonstration effect in the market, and will also form a positive cycle of mutual promotion between shareholder rights and the market value of listed companies, continuously improving the medium and long-term investment value of listed companies, and thus enhancing the sense of gain for investors.
New tools stimulate participation and enthusiasm.
The policy of re-lending for share buybacks and increases has timely provided policy dividends for listed companies to implement share buybacks and increases. Many listed companies, including China Jusheng, Jintian Shares, Kejie Intelligent, China Resources Materials, and Zanyu Technology, have recently revealed in their announcements the situation of using special loans for share buybacks and increases.
Zanyu Technology recently said that it plans to buy back the company's shares through centralized bidding transactions for the later implementation of equity incentives or employee stock ownership plans. The company has obtained a "loan commitment letter" from the Hangzhou Branch of China Postal Savings Bank, promising to provide special loan support for the company's repurchase of A-shares this time, with a loan amount of 140 million yuan and a loan term of 1 year.
Zhongyuan Expressway recently announced that the controlling shareholder Henan Transportation Investment Group Co., Ltd. plans to increase the company's shares, with a total increase amount of not less than 100 million yuan and not more than 200 million yuan, and not exceeding 2% of the company's total share capital. The China Construction Bank Henan Branch agrees to provide a stock increase loan of not more than 200 million yuan for Henan Transportation Investment Group to increase the company's A-shares, with a term of 1 year.
Data shows that as of November 25, since the implementation of the policy on re-lending for share buybacks and increases, a total of 157 listed companies in the A-share market have disclosed announcements related to re-lending for share buybacks and increases, and have obtained a total loan limit of about 36.7 billion yuan from financial institutions.
"The first phase of the re-lending tool has a quota of 300 billion yuan, and the scale will be expanded according to the situation in the future, which will effectively boost the volume of stock market increases and buybacks, help to expand market incremental funds, improve the quality and liquidity of listed companies, and promote the long-term stable development of the capital market." said the chief analyst of Hua Tai Securities Bank Securities.