Spend 76.96 million! Tencent starts his first buyback this year.

Recently, Tencent's shares have nearly halved, falling more than 45 per cent from a high of HK $773.4 to around HK $420, and the price-to-earnings ratio has fallen to 17 times earnings, an all-time low. In the face of a sharp pullback, Tencent bought back 180000 shares of the company on Thursday, Aug. 19, involving a capital of 76.965 million yuan at a repurchase price of 419.4 to 435.2 yuan per share.

In fact, this is not Tencent's first buyback. In more than a decade after listing in 2004, Tencent has been carrying out buyback operations one after another. It is worth noting that every time Tencent buys back shares, the time point is often in the stage when the company's stock price hits bottom. Generally speaking, after the company buyback, the stock price will mostly have a good performance and return to the upward channel.

So, will this buyback ease the pessimism in the market and boost stock prices? Taking history as a mirror, let's go back to Tencent's buyback history.

From 2005 to 2014, it spent HK $4.34 billion on repurchase.

After listing in 2004, Tencent spent HK $4.34 billion on a buyback operation in 2014.The first buyback began on November 24, 2005, the second year after Tencent was listed on the market, and intensive buybacks were carried out in February 2006.

In retrospect, the buyback effectively supported the stock price at that time and boosted market confidence. In the long run, with the rapid development of the company, the stock price has soared, and the buyback has been rewarded hundreds of times.

Buy back again in 2018

2018Tencent has carried out repurchases for 11 consecutive trading days since Sept. 7, and the repurchase data are as follows:

After the end of the buyback plan, share prices began to rise along with the global economic recovery and the rapid growth of Tencent's performance.

Buy back again in 2019

After the announcement of the results in the second quarter of 2019, the results fell short of market expectations, coupled with the influence of multiple factors such as fluctuations in the external environment, Tencent's share price showed a volatile downward trend. In just one month, the share price fell from as low as HK $372.4 to HK $312.2, down more than 13%.

After the stock price was depressed for many days, Tencent contributed money to implement the buyback on August 28th.In 31 trading days, a total of 3.4867 million shares were repurchased, with an average repurchase price of HK $332.9 and a total investment of HK $1.161 billion.

Looking back, the buyback began to bottom out the next day and began to rebound, and the buyback range was the bottoming process, and then the share price soared all the way to an all-time high.

Summary

Nowadays, in the face of the sudden wind direction of the market and the uncertainty of the policy environment, the pessimism of the market continues to spread, and Tencent has also fallen into a historical low valuation. There is even a view that the company's investment logic and business model have undergone substantial changes.

In the face of the complicated and confusing market, can Tencent's buyback reconstruct investor confidence? rub one's eyes and wait.