This year's Hong Kong stock market buyback fever rose. September 9, Tencent Holdings once again spent 350 million Hong Kong dollars to buy back 1.15 million shares, which has been Tencent Holdings 16 consecutive days of share repurchase, the average daily buyback amount of 350 million Hong Kong dollars.
This year, the number and scale of Hong Kong companies repurchasing shares far exceeded the level of the same period last year. Reporter according to data statistics, as of September 12, the year has 178 Hong Kong listed companies have implemented the repurchase of shares, an increase of 32%; repurchase a total of 52.3 billion Hong Kong dollars, a year-on-year surge of 136%, compared with last year's annual increase of 13%.
Tens of billions of "repurchase big" is the emergence of the Hong Kong stock buyback market this year, a major feature. From the repurchase scale, Tencent Holdings, AIA, HSBC Holdings, Xiaomi Group, Great Wall Motors, China Gas, Changshi Group and other seven companies repurchase amount of more than 1 billion Hong Kong dollars. Among them, Tencent Holdings, AIA repurchase amount of 15.6 billion Hong Kong dollars and 15.1 billion Hong Kong dollars, while the same period last year, there is no tens of billions of Hong Kong dollars of repurchase of the company.
The industry generally believes that this year, the Hong Kong stock market performance is sluggish, valuation continues to decline, triggering the listed companies have to buy back to protect the plate. Data show that year-to-date, only 23 of the 178 companies mentioned above have seen their share prices rise, accounting for 13 percent of the total.
"Hong Kong stocks have experienced several rounds of buyback waves, all of which occurred when the market had already experienced a more substantial decline and valuations had reached a lower level, and as the market and valuations further downward, the strength of listed companies' buybacks will continue to strengthen." Fu Rao, executive director of the Hong Kong International Institute for New Economy, told the Securities Daily reporter.
From the industry distribution point of view, according to the Hang Seng level 1 industry classification, the implementation of buyback of Hong Kong companies are mainly concentrated in the non-essential consumer (39), health care (30), information technology industry (28) three major industries. Among them, companies in the non-essential consumer sector are widely distributed in the areas of education, jewelry and watches, advertising and promotion, household appliances, and consumer electronics.
Fu Rao analyzed that most of the companies in the non-essential consumer, healthcare and information technology sectors have experienced deep stock price adjustments. Companies in these sectors are highly profitable, have relatively abundant cash flow to implement buybacks, have good fundamentals, and are also in line with the direction of the new economy.
At the same time, industry experts believe that the repurchase initiative shows that the relevant company's share price is in the state of underestimation, releasing a "bottoming out" signal, but also highlights the value of medium- and long-term investment.
According to relevant regulations, shares bought back by Hong Kong-listed companies must be canceled, which invariably improves the rights and interests of the majority of shareholders. "Hong Kong stock companies repurchase shares and then cancel them, releasing a major favorable signal." Wang Weijia, general manager of Beijing Yangguang Tianhong Asset Management Company, told the Securities Daily reporter that, on the one hand, the relevant company reduces the number of outstanding shares, and the financial indicators such as earnings per share and net assets per share are improved, which indirectly improves the rights and interests of the shareholders; on the other hand, the company is also able to convey to the market the information that the company's share price is underestimated, cash flow is abundant, and the business outlook is promising, which enhances the confidence of the market and pushes the company's valuation to return.
In fact, the above implementation of the buyback of Hong Kong companies are mostly held by the southward funds, medium and long-term investment value is recognized. Data show that the aforementioned 178 companies, 104 by the southbound funds holdings, accounting for 58%. Among them, Xiaomi Group, HSBC Holdings, China Mobile's southward capital holdings in the forefront.
Additionally, more typical, such as Tencent Holdings, Shanghai, Shenzhen and Hong Kong pass data show that in recent years, Tencent Holdings has received a total of 1 year of southward funds net purchase of 49.4 billion Hong Kong dollars, topped the list. Up to now, the year southward funds total net buying 224.8 billion Hong Kong dollars, reflecting the medium- and long-term value of Hong Kong stocks to the good.
Wang Weijia analyzed that Hong Kong stocks are at the bottom of the value of the region, the wave of buybacks, the market bottoming signal highlights. In this situation, the southbound funds to participate in the willingness to enhance the net inflow of funds to increase the allocation of Hong Kong stocks, reflecting the long-term optimism for the value of Hong Kong stocks.
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