Hong Kong stock market is experiencing a wave of buybacks led by the companies themselves, with a number of high-quality companies such as tech giant Tencent Holdings (00700.HK), leading life service provider Meituan-W (03690.HK), and high-end investment education leader JF Capital (09636.HK) actively repurchasing shares.

Tencent Holdings' repurchase amount ranks first, currently repurchasing at an almost HKD 1 billion per day rate, and announcing plans to repurchase shares worth at least HKD 100 billion by 2024, according to the current Tencent market capitalization of HKD 3.5 trillion.(Share buyback ratio is about 2.86%);

At the same time, on June 11, 2024, Meituan announced a $2 billion stock buyback plan, according to Meituan's current market capitalization of HKD 709.5 billion.(Share buyback ratio is about 2.2%).

Since announcing the share buyback on March 26, 2024, JF Capital has actively executed 39 repurchases, repurchasing a total of 17.73 million shares. During this period, JF Capital invested more than HKD 198 million in repurchases, and the repurchase funds used were close to the pre-disclosed upper limit of HKD 200 million, and the repurchase is basically completed.

Through the repurchase of its own shares, JF Capital not only demonstrates the company's management's confidence in the company's future development and its high regard for shareholder interests, but more importantly, it sends a clear signal to the market: the company believes that the current share price is lower than its intrinsic value.

The company's board of directors believes that its share value in the market is undervalued, and the company has sufficient financial resources to execute this repurchase plan while maintaining the continued growth of its business. Share buybacks can not only reduce the total number of shares in circulation in the market, increase earnings per share (EPS), and increase the inherent value of stocks, but also stabilize stock prices in market fluctuations and protect investor interests.

Resilient management, significant competitive advantages

From a fundamental perspective, JF Capital has demonstrated its robust management and good growth potential. According to the 2023 annual report, the company achieved operating income of CNY 1.965 billion, a year-on-year increase of 6.23%, despite a decline in A-share turnover. This shows the company's strong resilience in its main business and market competitiveness.

Although net profit attributable to shareholders was affected by share-based compensation expenses, it still reached approximately CNY 320 million after adjustments; net operating cash flow increased by 86.6% year-on-year to CNY 0.444 billion.

From the financial report, it can be seen that the company's order growth rate exceeded the revenue growth rate in 2023, and the refund rate decreased year-on-year, further confirming the company's leading position and competitive advantage in the industry. The continuous growth of the company's scale, healthy balance sheet, and stable cash flow, the robust performance of these key indicators, not only intuitively reflect the company's profitability, but also reflect the company's maturity in terms of risk management.

In addition to these quantifiable financial indicators, the company also has an experienced management team, with keen insight into market dynamics and the ability to develop and execute strategic plans in line with the company's long-term development vision. Such a team is one of the company's most valuable assets and is also a core driving force for the company's continued innovation and progress.

Multiple institutions have given positive ratings, with expectations for future improvement.

In terms of market performance, JF Capital's stock price has risen against the trend since April, which is closely related to the improvement of the company's fundamentals and the implementation of recent stock buyback plans. Multiple institutions have recently given positive ratings to JF Capital, further enhancing investors' confidence and expectations of the company's future development prospects.

For example, Guojin Securities gave a positive evaluation of the company's unique business model showing strong resilience during a market downturn and gave a "buy" rating in its first coverage report.

Kaiyuan Securities also mentioned in its latest research report that the company's significant market leadership in the high-end investment education services market is affirmed, and it has given a "buy" rating in its first coverage report.

Taking into account the company's position in the industry, market performance, institutional ratings, and continued innovation capabilities, the market holds an optimistic attitude towards the company's future development. It is expected that JF Capital will continue to demonstrate its resilience and potential for growth in its future operations, achieving steady and sustainable performance improvements.

Conclusion

Firstly, Jiu Fang Wealth has demonstrated confidence in the value of its stocks through a significant buyback, which is also a positive commitment to capital market investors. Secondly, from a fundamental perspective, considering the strong resilience and market competitiveness shown by the company in a weak environment, it is reasonable to believe that the company's performance will also improve significantly as the capital markets gradually improve in the future. Finally, with the positive ratings given by multiple investment institutions, investors can closely monitor the company's subsequent developments and share in the growth dividend of Jiu Fang Wealth.