This weekend, no less than 10 listed companies on the Shanghai and Shenzhen stock markets revealed new buyback plans.

Great Wall Motor announced on the evening of October 16 that he intends to use his own funds to buy back the company's shares in the form of centralized bidding transactions, with a repurchase quantity of not less than 20 million shares (inclusive), no more than 40 million shares (inclusive), and a repurchase price of no more than 45 yuan per share. the proposed repurchase fund is capped at 1.8 billion yuan.

Focus Media, a leading elevator advertising company, plans to buy back some of the public shares through the secondary market with its own funds. The total capital of this repurchase is not less than 400 million yuan and not more than 800 million yuan, and the repurchase price is not more than 7 yuan per share.

The Light and Textile City intends to buy back the shares by means of centralized bidding, the total capital of the shares to be repurchased shall not be less than 410 million yuan (inclusive) and not more than 806 million yuan (inclusive), and the repurchase price shall not exceed 5.50 yuan per share (inclusive) and not less than 2.80 yuan per share (inclusive).

The directors of many companies have proposed to buy back the shares of the company.

For example, Lin Min, chairman of Crystal Optoelectronics, submits a proposal to buy back the shares of the company, the total capital of the repurchased shares is not less than 100 million yuan, no more than 150 million yuan, and the price of the repurchased shares does not exceed 14 yuan per share. The chairman of Yunda shares also proposed to buy back the company's shares, with a total repurchase fund of no more than 100 million yuan (including) and a repurchase price of no more than 20 yuan per share. The chairman of Yahua Group proposed to buy back 200 million to 300 million yuan.

In addition, more than 30 listed companies, including Yingke Medical, Dragon Technology, Fenghua Hi-Tech, Zhende Medical, and so on, announced the latest progress of buyback implementation over the weekend.

The buyback of A shares exceeded 100 billion yuan this year.

Data show that since the beginning of this year, the total repurchase amount of listed companies in Shanghai and Shenzhen has exceeded 100 billion yuan. A large number of A-share listed companies bring incremental funds to A-shares through buybacks, using "real gold and silver" to express their confidence in the company's operating conditions and future development prospects.

Specifically, the repurchase amount of 806 listed companies exceeded 1 million yuan, 187 listed companies exceeded 100 million yuan, and 13 companies, including Rongsheng Petrochemical, Midea, Hengli Petrochemical, Shunfeng Holdings, BYD and Haier Smart Home, have repurchased more than 1 billion yuan.

In September, the A-share market continued to fluctuate, trading in the two markets was in the doldrums, and listed companies joined the buyback army one after another. Data show that since September, more than 100 listed companies have disclosed repurchase plans, with the proposed repurchase limit totaling 13.9 billion yuan.

For example, Shunfeng Holdings, which has just completed a repurchase of nearly 2 billion yuan in September, announced again on September 22nd that based on its confidence in the future development prospects and a high degree of recognition of the company's value, the company once again launched a buyback plan with a maximum limit of 2 billion yuan.

The repurchase of shares by listed companies has a very positive significance in maintaining the stock price of the company. Especially at a time when the overall performance of the market is poor and the stock price continues to fall, buybacks are also seen as a signal that the company's share price is undervalued, which can ease the panic caused by market fluctuations to minority shareholders.

According to China Merchants's calculation, since 2018, the buyback of listed companies will bring a relatively significant cumulative absolute return to the company's stock price, and the cumulative excess return will be maintained at about 1%. Since the beginning of this year, the stock buyback earnings on the same day and the next three days of earnings performance is relatively good.

The number and amount of Hong Kong stock buybacks hit an all-time high

The Hang Seng Index has fallen 29.11% so far this year, falling for three consecutive years. The Hang Seng Technology Index has fallen 43.46% this year, and the share prices of many weighted stocks have fallen sharply.

Hong Kong stock prices continue to fall, and Hong Kong stock valuations are at record lows. Data show that Tencent's rolling price-to-earnings ratio is as low as 11.6 times, which is at the lowest historical quantile in the past decade. The latest price-to-earnings ratio of the Hang Seng index is as low as 7.9 times, below most of the time range since the index was released.

As the index continues to hit new lows, Hong Kong stocks have set off a buyback storm this year. A number of Hong Kong stock companies, including Tencent, Weichai Power, AIA Group Limited and Great Wall Motor, announced big buybacks.

The Hang Seng Index has fallen lower and lower, and the valuations of Hong Kong-listed companies have been falling, boosting confidence through share buybacks. For the whole year, as of October 16, more than 200 Hong Kong companies had implemented buybacks, with a total repurchase amount of 73.7 billion Hong Kong dollars (about 67.5 billion yuan).

The number and amount of Hong Kong stock buybacks reached an all-time high. For the whole of 2021, only 188 companies repurchased 4.815 billion shares, with a total repurchase amount of HK $38.068 billion.

Supervision plans to optimize buyback conditions

On October 14, in order to support and encourage listed companies to implement share buybacks in accordance with the law, actively safeguard the company's investment value and the rights and interests of minority shareholders, and better meet the actual market conditions and company needs, the CSRC revised some provisions of the rules on share Repurchase of listed companies and solicited opinions from the public. The public can provide feedback before November 13. The Shanghai Stock Exchange and the Shenzhen Stock Exchange also simultaneously issued relevant amendments for public consultation.

The CSRC pointed out that share repurchase is an important international means to maintain corporate investment value, improve corporate governance structure and enrich investor return mechanism, and it is also a basic institutional arrangement in the capital market. In recent years, listed companies have been able to prudently formulate buyback plans from reality, implement repurchases in accordance with the rules and regulations, the activity of share repurchase continues to increase, the number and scale of households have shown a trend of growth, and the market has responded well. With the change of the market environment and the diversification of market demand, the setting of the conditions for some share repurchase is more strict, and the convenience of implementation is not enough. Share repurchase has not yet become a long-term mechanism to maintain the value of listed companies.

In order to further improve the institutional inclusiveness and implementation convenience of buyback, combined with the practice, some provisions on buyback conditions in the Repurchase rules are optimized and improved.

Specifically, the main optimization measures are as follows:

A number of market participants have made positive comments on the adjustment and optimization of the repurchase rules, which will provide greater flexibility and autonomy for listed companies to implement buybacks, which will not only help listed companies to safeguard their interests, but also boost market confidence.