After a brief pullback, A-shares have resumed their offensive, and a new wave of share buybacks is brewing.

On Monday (October 14th), before the market opened, China Merchants Group's A-share companies collectively issued announcements of shareholding increases and buybacks. Five companies, including China Merchants Port and China Merchants Shekou, proposed that the company buy back and cancel shares, with a total amount exceeding 2.3 billion yuan; China Merchants South Oil announced the controlling shareholder's plan to increase holdings. State-owned enterprises such as China Foreign Trade Transportation and Liaoning Port also released share buyback or increase plans.

This year, under the encouragement and guidance of policies, the enthusiasm for share buybacks by A-share companies has continued to rise. When the market fluctuates and adjusts, many listed companies' major shareholders and actual controllers have bought back shares to "protect the market." Since the end of September, A-shares have ushered in a strong upward trend, and listed companies are still taking turns to buy back shares.

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Choice data shows that since the market trend has strengthened, from September 24th to October 13th, the A-share market has disclosed nearly 600 buyback announcements. Recently, companies such as Meihua Biology and Guangdian Measurement have announced buyback plans, with the proposed buyback amount ranging from 200 million to 500 million yuan. State-owned enterprises have also joined the buyback "relay race," with companies like Wuhan Merchants Group and Beijing-Shanghai High-Speed Railway disclosing buyback progress announcements.

"Driven by various factors, the wave of buybacks and increases continues in the market," Tian Lihui, Dean of the Institute of Financial Development at Nankai University, told First Financial. Recently, the central bank has created a policy for stock buyback and increase re-lending, which is expected to provide listed companies with a more abundant source of funds and reduce the cost of buybacks and increases. Some market views also believe that high-quality non-bank state-owned enterprises with low valuations and no buybacks in recent years are expected to take over the buyback trend.

China Merchants Group companies collectively buy back and increase holdings

On the 14th, the A-share market rebounded throughout the day, with the three major indices all closing up more than 2%. Before the market opened that day, China Merchants Group companies collectively issued favorable announcements of shareholding increases and buybacks.

Specifically, five companies announced that the chairman proposed to buy back shares, and all the bought-back shares will be canceled to reduce registered capital. In terms of amount, China Merchants Shekou plans to buy back an amount of 351 million to 702 million yuan; China Merchants Highway plans to buy back an amount of 310 million to 618 million yuan; China Merchants Shipping, China Merchants Accumulation, and China Merchants Port plan to buy back amounts of 222 million to 443 million yuan, 78 million to 156 million yuan, and 195 million to 389 million yuan, respectively.

Simply adding up, the proposed buyback amount for the above five companies is between 1.156 billion and 2.308 billion yuan.

In addition, China Merchants South Oil officially announced an increase, stating that the company's controlling shareholder, China Yangtze River Shipping Group Co., Ltd., plans to increase its A-share holdings by 1% to 1.72%, with a maximum increase price of 4.67 yuan per share.In the morning session of the trading day, there were announcements of share increases by state-owned enterprises, with the main actors being China Foreign Trade and Transportation Corporation (Sinotrans) and Liaoning Port Co., Ltd.

Sinotrans released two announcements, one of which was the chairman's proposal to repurchase company shares worth between 271 million and 542 million yuan, and the other was the plan by the controlling shareholder, China Foreign Trade and Transportation (Group) Co., Ltd., to increase its holdings in the company's A-shares, with the amount ranging from 250 million to 500 million yuan, and the maximum purchase price capped at 7.43 yuan per share.

Liaoning Port stated that Dalian Port Group Co., Ltd., an action person in concert with the controlling shareholder, intends to increase its holdings in the company's A-shares, with the amount ranging from 250 million to 500 million yuan, and the maximum purchase price capped at 2.06 yuan per share.

Against the backdrop of the market's bottoming out and subsequent recovery on that day, the aforementioned repurchased and increased shares all closed higher, with China Merchants South Oil up 6.98%, Sinotrans up 6.05%, and China Merchants Shekou, China Merchants Jiyu, and China Merchants Highway all rising by more than 4%.

The A-share repurchase wave continues

This year, the enthusiasm for share buybacks by A-share companies has remained high. Public data shows that in the first eight months, a total of 1,127 listed companies on the Shanghai and Shenzhen stock exchanges newly disclosed 1,204 repurchase plans, an increase of 814 companies and 882 plans compared to the same period last year; a total of 1,463 listed companies actually implemented share repurchases, with a total amount exceeding 100 billion yuan.

Since the end of September, the A-share market has seen consecutive days of significant increases, and the repurchase wave continues. Choice data shows that from September 24 to October 13, there were 595 repurchase announcements in the A-share market. In terms of repurchase progress, during this period, 370 companies implemented repurchases, 146 completed them, another 28 repurchase plans were approved by shareholders' meetings, and 50 were at the board of directors' proposal stage.

Which companies are continuing the repurchase? Looking at the companies that have completed or implemented repurchases, materials and pharmaceuticals and biotechnology are the mainstream industries.

State-owned enterprises are also an important force in this wave of repurchases. Wind data shows that during the aforementioned statistical period, a total of 76 central state-owned enterprises released repurchase announcements, involving Xuzhou Construction Machinery, Wuhan Commercial Group, Beijing-Shanghai High-Speed Railway, etc. In terms of repurchase progress, 34 companies implemented repurchases, 19 completed them, 7 repurchase plans were approved by shareholders' meetings, and another 16 were at the board of directors' proposal stage.

In this wave of significant increases in the A-share market, which listed companies are making large-scale repurchases?Choice data indicates that from September 24th to October 13th, Fangda Carbon and Leo Group led in share repurchase quantities, with 80.44 million shares and 73.85 million shares respectively, followed closely by Liaoning Port Co., Ltd. and Quzhou Development, both of which repurchased over 60 million shares during this period.

In terms of repurchase amounts, during the aforementioned period, WuXi AppTec topped the list with a repurchase amount of nearly 980 million yuan, followed by Fangda Carbon and Wens Foodstuff Group with repurchase amounts of 394 million yuan and 264 million yuan respectively. Yili Group, Tongwei Co., Ltd., and SF Holding also had repurchase amounts exceeding 100 million yuan within the same period.

Recently, Liaoning Port Co., Ltd. disclosed its latest repurchase plan. On September 24th, the company announced its intention to conduct a second share repurchase through a centralized bidding transaction, with the total repurchase funds ranging from 420 million to 840 million yuan. The repurchased shares will be fully canceled and the company's registered capital will be reduced accordingly, with the repurchase price not exceeding 1.87 yuan per share.

Attention should be paid to risks such as manipulating stock prices through share repurchases.

This year, policies have continuously encouraged and guided listed companies to repurchase shares.

In April, the new "Nine National Articles" proposed guiding listed companies to legally cancel shares after repurchasing them; at the end of September, the central bank created a policy for re-lending of stock repurchase and increase.

Tian Lihui believes that at this stage, the wave of share repurchases and increases is still continuing in the A-share market, driven by various factors.

He analyzed that, first of all, the confidence of listed companies and their controlling shareholders in the company's future development is the internal driving force for share repurchases and increases; secondly, the policy of re-lending of stock repurchase and increase created by the central bank provides listed companies with a more abundant source of funds, reducing the cost of share repurchases and increases; in addition, after a period of sluggishness in the A-share market, the stock prices of some companies are undervalued, and share repurchases and increases have become an important means to enhance company value and protect shareholder interests.

Regarding the repurchase entities, Tian Lihui mentioned that the increase and repurchase behavior of central state-owned enterprises helps to enhance market confidence and stabilize market sentiment. Central state-owned enterprises usually have high-quality assets and good profitability, and their increase and repurchase also help to promote the company's stock price back to a reasonable level, creating greater value for investors.

In terms of repurchase methods, cancellation-type repurchases have frequently appeared within the year. Tian Lihui said that previous repurchase methods were mostly used for employee stock ownership plans, equity incentives, etc., and cancellation-type repurchases help to optimize the share capital structure, increase the gold content per share, and stabilize and increase the stock price.He also noted that while share buybacks are good news for investors, multiple risks still need to be monitored. "Firstly, it is important to understand the motives and purposes behind the listed company's share repurchase to avoid being deceived by false buybacks; secondly, whether the price and quantity of the repurchased shares are reasonable to prevent the listed company from manipulating the stock price through buybacks; thirdly, pay attention to the operating conditions and profitability of the listed company to avoid blindly following the trend in investment," said Tian Lihui.