Since March, the A-share market has continued to fluctuate.
The stock prices of most listed companies have fallen below the "threshold" recognized by listed companies. Under such circumstances, listed companies have thrown out repurchase plans to "protect the market."
From March 7th to 17th, Shanghai-listed companies disclosed a total of 110 announcements related to repurchase and increase in holdings, including 67 announcements related to share repurchase, involving 54 listed companies.
Among them, on the evening of March 17, a number of listed companies, including Southern Media and Shanying International, announced that they planned to issue corporate bonds to repurchase company shares.
Several executives of listed companies told the First Financial Reporter that there are two main reasons for this move. One is that domestic financial institutions are currently increasing financing support for private enterprises, especially the real economy manufacturing industry; value, repurchase to enhance public investors' confidence in the company's growth.
In response to this phenomenon, some professionals have analyzed that the interest rate of bonds issued by listed companies through the platform of the Shanghai Stock Exchange is lower than the market average, which can reduce company costs.
Furthermore, the listed company's repurchase by means of increased leverage seems to have paid a cost, but in fact it conveys a signal that its own stock price is undervalued and that it is optimistic about the company's development, which has played a significant role in the transmission of the company's value.
Issuing bonds and repurchasing "four or two thousand pounds"?
On the evening of March 17, Nanfang Media announced that it plans to repurchase the company's shares by issuing corporate bonds. The repurchase price is not higher than 12 yuan per share. It accounts for 1.13%~2.25% of the company's current market value.
The company will complete the share repurchase within three months from the date of deliberation and approval at the general meeting of shareholders.
Lei He, secretary of the board of directors of Southern Media, told the first financial reporter that the company's share repurchase is mainly based on two reasons: First, it has confidence in the country's overall economic environment. The goal set in this year's government work report is to increase GDP by 5.5% It is expected that the policy of stabilizing economic growth will continue to exert force. The promotion of share repurchase is also a positive measure for the company to stabilize the financial market. The company believes that the price of securities will eventually return to the fundamentals that reflect the steady growth of China's economy.
The second is to have confidence in the company's future. Since its listing, Southern Media's operating performance and cash dividends have grown steadily year by year, continuing to reward shareholders.
Even under the background of dynamic anti-epidemic, in the first three quarters of 2021, the company's net profit has achieved a high growth of 36.93%, and the cash flow is abundant and stable. The management team is confident that it will continue to maintain a good momentum of development.
The current stock price fails to reflect the fundamentals and intrinsic value of the company's sound development, and the company's management highly recognizes and supports the share repurchase.
"Debt issuance is an important means of financing for listed companies. The company has always planned to issue bonds at an appropriate time. At present, the bond issuance policy is relatively good. Now the company plans to implement a repurchase plan, so it wants to implement a package of plans to achieve good interaction with the capital market. "Lei He, Secretary of the Board of Directors of Southern Media, said in response to the reasons for choosing the bond issuance method.
Regarding the impact of the issuance of bonds to buy back shares, Nanfang Media said, "The company has the ability to pay the repurchase price, and the proposed repurchase amount will not have a significant impact on the company's solvency, and will affect the company's operations, finance and future development. There will be no significant impact.”
Similar to Southern Media, Shanying International also plans to issue corporate bonds to buy back shares.
On the evening of March 17, the company stated that the repurchase price of shares should not exceed 3.70 yuan per share, the total capital should not be less than 250 million yuan and not more than 500 million yuan, and the corresponding number of shares to be repurchased was 67.5676 million shares to 135 million shares. interval.
"There has been some pessimism in the financial environment at home and abroad recently, and investors lack confidence, which has caused the company's stock price to deviate from the corporate value. Therefore, the decision to repurchase shares is mainly necessary to safeguard the company's value and shareholders' rights and interests, so as to enhance public investors' confidence in the company. The growth of confidence will bring the company's investment value to a reasonable return." Yan Dalin, Secretary of the Board of Directors of Shanying International, told Yicai.com.
Regarding the reason why the repurchase funds come from the issuance of bonds, Yan Dalin said that there are two main considerations. One is that the company hopes to optimize the current debt structure and achieve a balanced distribution of long-term and short-term debts. The financing support of the real economy manufacturing industry has been increased, and the company has made full use of the policy and environmental dividends to secure funds for corporate development. Third, the company has confidence in the future profitability of the company, and believes that the current expected return of its own company equity will exceed that of bonds.
According to the relevant rules, there are three ways to deal with the repurchased shares: future sale, cancellation, use for equity incentives or employee stock ownership.
The shares that Southern Media and Shanying International plan to repurchase this time are all used for sale.
"We have no plans for equity incentives and employee shareholding for the time being. In addition, there are not many outstanding shares in the company, so we don't plan to cancel them, so we have the option of reducing our holdings," Lei He said.
In addition, CMOC and Huachuang Yangan also plan to issue bonds to finance share repurchase.
Among them, CMOC said that it plans to use part of the bond issuance funds to repurchase shares, and these shares will be used to implement equity incentives, employee stock ownership plans or methods permitted by laws and regulations in the future.
The total amount of funds that Huachuang Yangan intends to repurchase does not exceed 400 million yuan.
Some professionals said that the bond issuance-style repurchase is actually a reflection of the company's "self-confidence".
From a financial point of view, the asset-liability ratio of companies that issue bond repurchase is not high, and the debt pressure is not large, which is in line with the necessary conditions for bond issuance.
Such companies choose to issue bonds for repurchase, to a certain extent, they are sending a signal to the market that the company's current stock price is undervalued and that the company is optimistic about the company's future development. After all, debt repurchase still increases the company's repurchase cost.
54 Shanghai-listed companies repurchase "protection" in 10 days
When the A-share market fluctuated recently, most companies in the A-share market submitted announcements of value information, including announcements related to shareholding and repurchase.
From the perspective of the industry, the listed company's move is meant to boost market confidence.
From March 7 to 17, 2022, Shanghai-listed companies disclosed a total of 110 announcements related to repurchase and increase in holdings, including 67 announcements related to share repurchase, involving 54 listed companies.
These listed companies include large and medium-sized companies such as SAIC, Hengli Petrochemical, Oppai Home Furnishing, Nanshan Aluminum, Huiding Technology, Yuyuan, Bethel, Ordos, and Tianfeng Securities, among which more than 10 companies have launched repurchase plans.
Among them are large buyback programs.
On March 10, Hengli Petrochemical disclosed a new repurchase plan. It plans to repurchase a total of 1 billion to 1.5 billion yuan in the next 12 months. The price of the repurchased shares is not more than 30 yuan per share. The number is in the range of 333,333,300 shares to 50 million shares, and the proportion of repurchased shares accounts for about 0.47% to 0.71% of the company's total share capital
The shares repurchased by Hengli Petrochemical are intended to be used for the employee stock ownership plan.
The company stated that the move is based on confidence in the company's future development and recognition of the company's value. In order to establish and improve the company's long-term incentive mechanism, fully mobilize the enthusiasm of the company's employees, and effectively align the interests of shareholders, the company and the personal interests of employees. integrate.
As soon as the plan was disclosed, Hengli Petrochemical quickly implemented the "shot" and implemented the first repurchase through centralized bidding on March 12, with an amount of 172 million yuan.
In addition, on March 14, Hengrui Medicine also disclosed the repurchase plan, saying that it plans to use centralized bidding to repurchase the company's shares of 600 million to 1.2 billion yuan.
For example, based on the upper limit of the total repurchase funds of 1.2 billion yuan and the upper limit of the repurchase price of 60.22 yuan per share, the estimated number of repurchased shares is about 19.9269 million shares, accounting for about 0.31% of the company's current total share capital.
From the perspective of repurchase purposes, most companies implement employee stock ownership or equity incentives.
Regarding the rising phenomenon of listed companies' buybacks, industry insiders said that on the one hand, it is to boost market confidence and reverse the decline in stock prices; on the other hand, it is to determine the source of votes and reduce incentive costs for the subsequent implementation of equity incentives.