Ping An's share buyback plan this time is part of the 2024 long-term service plan, aimed at rewarding and retaining core personnel; these actions can be seen as employee benefits and shareholder value commitments. Industry insiders believe that stock buyback and cancellation have become important means for many companies to enhance intrinsic value.
China Ping An announced today that the 2024 annual long-term service plan has completed the stock purchase in the secondary market, with a total investment of 3.846 billion Hong Kong dollars, and the stock purchase funds come from the employee compensation system. Experts believe that Ping An's buyback plan this time is part of the 2024 long-term service plan, aiming to reward and retain core staff; these actions could be seen as employee benefits and shareholder value commitments, or could have a beneficial impact on the stock price.
AIA Insurance also spent 65.335 million Hong Kong dollars to repurchase 1.12 million shares. So far this year, Hubei Biocause Pharmaceutical has put forward a repurchase plan of not less than 50 million yuan, indicating that the repurchased shares will be used to reduce the registered capital. China Ping An also announced plans to cancel the repurchased 0.103 billion A shares. Industry experts believe that stock repurchase and cancellation have become important means for many companies to enhance intrinsic value.
Spending 3.846 billion Hong Kong dollars on buybacks can be seen as employee benefits and a commitment to shareholder value.
China Ping An announced today that the 2024 annual long-term service plan completed the stock purchase in the secondary market from August 23, 2024, to September 20, 2024, purchasing a total of 106,896,000 H shares of the company, accounting for 0.587% of the total share capital of the company, with a total transaction amount of 3,845,543,293.31 Hong Kong dollars (including fees), and an average transaction price of about 35.85 Hong Kong dollars per share. The above stock purchase funds all come from the staff compensation limit.
Huang Lichong, President of Huisheng International Capital, told Caijing reporters that the historical background of Ping An Group's share buyback opportunity may be related to several factors, such as market conditions, management believing that shares are undervalued in a bear market; there may be strategic plans to consolidate ownership, reduce capital costs, or adjust its capital structure to obtain better financial leverage, etc.
Looking at Ping An Group's repurchase this time, 'The repurchase plan is part of the 2024 long-term service plan, aimed at rewarding and retaining core personnel. The funds used for repurchase come from the amount retained for long-term service payment to employees, indicating a focus on employee compensation and retention, this action can be seen as a commitment to employee benefits and shareholder value, which may lead to positive market acceptance and beneficial effects on the stock price,' Huang Lichong also stated.
The announcement also shows that a total of 75,175 core talents voluntarily participated in the company's 2024 annual long-term service plan. After this repurchase, the shareholdings of directors, supervisors, and senior management amount to 2,929,348 shares, accounting for 2.74% of the 2024 annual long-term service plan; other employees' shareholdings amount to 103,966,652 shares, accounting for 97.26% of the 2024 annual long-term service plan.
Insurance companies' share buybacks and cancellations are ongoing, beneficial for enhancing intrinsic value.
Today, AIA Insurance also announced that it spent 65.335 million Hong Kong dollars to repurchase 1.12 million shares, with a repurchase price per share ranging from 57.9 to 58.65 Hong Kong dollars.
Huang Lichong stated that the impact of share buybacks on stock prices could be multifaceted. For investors, it sends bullish signals. As market confidence in the company grows, it may lead to a rise in stock prices. Buybacks also reduce share supply, potentially creating upward pressure on stock prices. Furthermore, buybacks can improve financial ratios, such as EPS, making stocks more appealing to investors, further supporting stock prices.
On July 16 of this year, Ping An announced that it had cumulatively repurchased 102,592,612 A shares from August 27, 2021, to August 26, 2022. Based on confidence in the company's future development and to protect the interests of investors, the company intends to change the purpose of this buyback, planning to cancel the 102,592,612 A shares held in the company's dedicated buyback securities account. If this cancellation is completed, the company's registered capital and total share capital will be correspondingly reduced.
Tianfeng Securities has pointed out that share repurchases followed by cancellations by listed companies result in a decrease in share capital. Under unchanged current profit and dividend payout ratios, financial indicators such as EPS, ROE, and dividend per share will improve, thereby enhancing the intrinsic value of listed company stocks. Industry experts note that using share buybacks for cancellations has become an important means for many companies to enhance their intrinsic value.
On June 4, Hubei Biocause Pharmaceutical announced that the company plans to repurchase some of its A shares through centralized competitive trading. The planned repurchase amount is not less than 50 million yuan and not more than 0.1 billion yuan. The repurchase period will be within 12 months from the date of approval of the share buyback plan at the company's general meeting of shareholders. Hubei Biocause Pharmaceutical also stated that the repurchased shares will be used to reduce registered capital.
"When a company repurchases its own stock, it indicates the company has great confidence in its operations. Listed companies that repurchase their own shares are worthy of investors' trust for at least a certain period of time," said Hu Jiye, a professor at the Capital and Finance Department of the China University of Political Science and Law, to a reporter from Caixin Media.
Looking at the fundamentals, in the first half of this year, listed insurance companies all achieved good performance. Xukang, the chief analyst of Huachuang Securities' financial industry, pointed out that in the first half of the year, life insurance companies benefited from improved value rates, achieving good growth in new business value. On the investment side, they benefitted from a low base, combined with a high dividend strategy. Except for PICC, all achieved an uptrend in total investment yield. Looking ahead to the second half of the year, the logic of growth in new business for life insurance may have opportunities for volume and price dual-drive. Further interest rate reductions may bring continued improvement in value rates, and new policies with a low base are expected to achieve positive growth rates.