Recently, Kweichow Moutai announced its intention to repurchase company shares using its own funds, with an amount not less than 3 billion yuan and not more than 6 billion yuan, for the purpose of cancellation and reduction of the company's registered capital. This marks the first time Kweichow Moutai has implemented a cancellation-style repurchase since its listing, and the substantial amount and favorable method have set a strong example for others to follow.
Share buybacks have always been seen as a powerful endorsement of a listed company's investment value, serving as an effective signaling tool. Particularly in times of economic cycle fluctuations, market valuation adjustments, and corporate stock price declines, listed companies spending real money to "buy" their own shares can improve capital structure, optimize market value management, and boost market confidence.
Thanks to continuous guidance from regulatory authorities, the willingness and amount of share buybacks by A-share listed companies have been on the rise in recent years. In the first eight months of this year, about 1900 listed companies have actually carried out repurchase operations, with a total repurchase amount exceeding 130 billion yuan, doubling the amount compared to the same period last year.
It should also be noted that compared to major mature markets, there is still room for optimization in the timeliness, stability, and rationality of share buybacks by A-share listed companies. Issues such as low repurchase amounts, long repurchase cycles, and a higher number of buybacks for equity incentives and employee stock ownership plans rather than cancellation-style buybacks persist. Some listed companies lack sincerity in their buybacks, leading to a weak sense of gain for investors and thus reducing the effectiveness of buybacks.
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At a time when investors hope for stable market operations and reasonable returns, it is necessary to further enhance the awareness of listed companies to give back, with greater sincerity in optimizing share repurchase methods and improving the level of share buybacks.
Sincerity is reflected in the strength of the effort. In the view of some listed companies, spending a lot of money to buy their own shares does not allow major shareholders to receive cash dividends, nor does it directly increase company profits, which seems not cost-effective. Therefore, even if the company has ample funds on hand, they are reluctant to repurchase, or they carry out buybacks reluctantly and superficially. Such stinginess naturally makes it difficult for investors to accept and is even less effective in increasing the company's valuation. As the cornerstone of the capital market, listed companies should bear the responsibility of supporting the market and giving back to investors. When cash flow is abundant and planned scientifically and reasonably, and in the face of market fluctuations and stock price declines, they should present a sufficiently generous repurchase plan, actively "protect the market," inject liquidity into the market, stabilize it, and boost confidence.
Sincerity is reflected in the speed of action. While slogans may sound good, actions must follow suit. In practice, some listed companies' share buybacks have been suspected of "saying one thing and doing another": some are good at calculating and always want to repurchase shares at a lower price. After declaring a repurchase plan with enthusiasm, they delay and wait in execution, constantly consuming investor trust. Others, when the stock price is low, announce a large repurchase plan with fanfare, but then make excuses when the deadline approaches, falling into the vortex of "deceptive buybacks." Confidence cannot withstand deception. Listed companies should be more sincere and less套路-oriented, ensuring that their words are trustworthy and their actions decisive. They should try to shorten the repurchase cycle and execute the repurchase plan as soon as possible, avoiding turning good deeds into bad ones.
Sincerity is reflected in the quality of the method. Unlike buybacks for equity incentives or employee stock ownership plans, cancellation-style buybacks reduce the number of circulating shares, directly increasing net assets per share and earnings per share. This provides a more genuine and substantial return to all shareholders and has a more sustained and positive impact. Listed companies should actively implement cancellation-style buybacks, proactively "slim down" their share capital, enhance the sustainability and stability of buybacks, and establish a sound mechanism for regular buybacks and share cancellations, fostering a positive cycle of "enterprise development - investor trust - stock price improvement."
The sufficiency of sincerity makes a big difference in the outcome. Of course, to show full "self-buying" sincerity, one cannot lack the strength to "buy." This requires listed companies to focus on their main business, improve development quality, and increase operational performance, generating abundant cash flow continuously and having the confidence to make substantial repurchases. It is believed that with the continuous recovery and improvement of China's economy, and as capital market reforms continue to deepen, more and more listed companies will join the ranks of share buybacks, offering full-hearted repurchase packages, and sharing the fruits of high-quality development with investors.
