Our reporter Yin Gaofeng
In the face of the recent adjustment of the A-share market, many listed companies have actively launched share repurchase plans to boost market confidence.
According to the statistics of "Securities Daily" reporters, on the evening of March 15 alone, Rongsheng Petrochemical, Shangfeng Cement, Genesis, Torch Electronics, Bear Electric, Ruilian New Materials, Megmeet, Changyang Technology, Jintian Copper, More than 10 listed companies including Yi Delong and Fumiao Technology have issued share repurchase plans.
A day earlier, Midea Electric, Yutong Heavy Industry and many other companies had released share repurchase plans.
"The company's share repurchase is to increase the company's control at a low cost and express confidence in the market; the second is to help stabilize stock prices, restore investor confidence, and change the stock trend expectations." Capital University of Economics and Business Institute of Industrial Economics Director Chen Ji said in an interview with a reporter from "Securities Daily".
Share repurchase plan intensively released
On the evening of March 15, Ruilian New Materials announced that the company plans to repurchase shares with 50 million to 100 million yuan for employee stock ownership plans or equity incentives.
And this is just one of more than a dozen buyback plans that day.
"Under normal circumstances, a listed company's share repurchase is mainly based on the following four factors." Tong Tiehan, a finance and taxation expert and a distinguished professor of the School of Management of Xi'an Jiaotong University, said in an interview with a reporter from "Securities Daily". First, through share repurchase, It gives the market and investors a positive signal for the company's future development, and plays a positive role in maintaining the stock price or even pushing up the stock price and increasing the value of the enterprise; the second is to use share repurchase as a stock source for the company to implement equity incentives or employee stock ownership plans; The third is to adjust the company's registered capital, optimize the share capital structure, and ensure the company's control through share repurchase. Share the company's growth dividends.
Shangfeng Cement said that the company will repurchase the company's shares with its own funds of 200 million to 300 million yuan, and the repurchase price will not exceed 25.00 yuan per share, which will be used to implement employee stock ownership plans or equity incentive plans.
The shares repurchased by Genesis, Torch Electronics, Megmeet, Bear Electric, Jintian Copper, etc. are all intended to be used for employee stock ownership plans or equity incentive plans.
Rongsheng Petrochemical and Yi Delong said that the purpose of repurchasing shares is to boost investor confidence.
"Enhance the confidence of investors, promote the reasonable return of the company's stock price to the company's long-term intrinsic value, and promote the company's stable and sustainable development." Rongsheng Petrochemical said.
Beware of "flickering repurchase"
"Listed companies put forward the repurchase plan, which has a positive impact on the market." Tong Tiehan said, but the share repurchase plan should be legal, feasible, conducive to the sustainable development of the company, and must not damage the legitimate rights and interests of shareholders and relevant stakeholders.
"It is particularly worth noting that the company's repurchase of shares should be used clearly and strictly implemented. 'Flicker-style repurchase' and 'slogan-style repurchase' are strictly prohibited." Tong Tiehan said.
Chen Ji said that the share repurchase must be based on an objective judgment of the company's strength and the market, otherwise, unrealistic share repurchase will trigger market risks and damage the company's fundamental interests.
Performance support is a common feature of listed companies that repurchase shares this time.
Shangfeng Cement stated that the share repurchase is a pragmatic measure taken by the company to safeguard the interests of the majority of investors and enhance investor confidence in combination with factors such as financial status, operating conditions, future profitability and development prospects.
Since its listing in 2013, Shangfeng Cement has maintained a good growth and development. Its assets and revenue have quadrupled compared with those before listing, and its net profit has a compound annual growth rate of about 45%.
Rongsheng Petrochemical's performance report shows that in 2021, Rongsheng Petrochemical's total operating income will reach 181.535 billion yuan, a year-on-year increase of 69.24%; net profit will be 12.843 billion yuan, a year-on-year increase of 75.72%.
According to the previous performance report released by Ruilian New Materials, the total operating income of Ruilian New Materials in 2021 will be 1.539 billion yuan, a year-on-year increase of 46.67%; the net profit is 238 million yuan, a year-on-year increase of 35.91%.
(Securities Daily)