China Fund News reporter Ye Shijie
Intern reporter Zhao Xinyi
Since this year, the Hang Seng Index has pulled back significantly, and the decline has exceeded 28% since the beginning of the year. As the stock price declined, a large number of companies made large repurchases, and the Hong Kong stock market once again set off a wave of repurchases.
Wind data shows that as of October 13, 211 listed companies in the Hong Kong stock market have implemented share repurchases this year, with a total amount exceeding 72.8 billion yuan (HKD, the same below), setting a record since the Hong Kong stock market had repurchases in 2002, and 1.9 times the repurchases of 38 billion yuan in the whole year in 2021. By month, the repurchase amount in September was the highest, accounting for more than 25%.
Many industry insiders told reporters that the rise of the repurchase wave demonstrates the confidence of the company's management, and is expected to boost market sentiment while stabilizing the stock price, highlighting the medium- and long-term investment value of Hong Kong stocks.
repurchase entities are concentrated
large-scale repurchase frequently
In this round of repurchase wave, 9 listed companies have repurchased more than 1 billion yuan, accounting for 78% of the total repurchase. Among them, Tencent Holdings and AIA Insurance ranked in the top two with the "cliff-like" advantage, with total repurchasing amounts of 23.886 billion yuan and 18.614 billion yuan respectively; HSBC Holdings repurchased amounts of 3.515 billion yuan, ranking third; in addition, 6 companies including Xiaomi Group , Great Wall Motor , Changshi Group , WuXi Biologics, Swire Co., Ltd. A and China Gas , respectively. In addition to the huge repurchase amount, the frequency of this round of repurchase is also quite intensive. Take Tencent Holdings as an example. As of October 13, Tencent has repurchased the company's shares 75 times this year, and spent more than 600 million yuan on two consecutive trading days from October 12 to 13 to repurchase them. In addition, insurance giant AIA has also completed eight repurchases in October, with the repurchase amounts for four consecutive days from October 11 to 14 all of which were about 178 million yuan.
Anxin Asset Management Global Investment Department told China Fund News reporters that in this round of repurchase wave, information technology companies represented by Tencent and optional consumer companies represented by Great Wall Motors actively repurchased, but real estate companies withdrew from the stage of repurchase due to their own cash flow difficulties, and other reasons. The financial sector represented by AIA and HSBC has led significantly with a repurchase amount of HK$23 billion. At the same time, the repurchase strength of health care companies represented by WuXi Biologics and JD Health has also increased significantly compared with the previous rounds. Behind the structural changes, it also reflects the changes in the judgment of related industrial companies on their own prospects.
ChuangjinhexinHong Kong Stock Connect Growth Fund Manager Li Zhiwu said that the significant feature of this round of repurchase wave is that the repurchase entities are relatively concentrated. Li Zhiwu pointed out that compared with other tools to stabilize stock prices (such as management increase, employee stock ownership plan, share reward plan, etc.), the repurchase of listed companies is more conducive to restoring investor confidence due to large-scale financial support, and has a good effect on market value management, stabilizing stock price, and employee incentives.
Kiwang stocks continue to lead
" three barrels of oil " for the first time
From an industry perspective, among the 10 listed companies with the highest repurchase amount this year, in addition to Tencent leading the repurchase and continuously increasing its investment, Xiaomi Group also ranked very high, and JD Health, ranked tenth, also reached 942 million yuan.
As for whether Kewang stock repurchase can lead the sector to change from the bottom area to the upward trend, Anxin Asset Management Global Investment Department believes that the cooperation of fundamental dimensions is still needed. From the perspective of marginal changes in policy, capital structure, and valuation, it is already fluctuating and bottoming out of , but the impact of policy on fundamentals is lagging. The performance turning point and new normal growth of Internet companies are still unclear, and the opportunities for stock prices to rise still need to wait. Yin Lei, fund manager of the equity research department of Golden Eagle Fund, told reporters that whether the overall science and network stocks can recover need to be observed if the pace of the Federal Reserve's interest rate hike, Internet industry policies, progress of Sino-US audit supervision cooperation, and expectations of domestic economic improvement.
In addition, it is worth noting that among the "three barrels of oil", China National Offshore Oil and China Petroleum and Chemical Corporation have also joined the repurchase army.Wind data shows that China National Offshore Oil Corporation repurchased the company's shares in six times in September. As of now, it has repurchased 44.829 million shares, with a total amount of approximately 444 million yuan; China Petroleum and Chemical Corporation also repurchased the company's shares five times in late September, with a total amount of approximately 55.414 million shares, with a total amount of approximately 189 million yuan.
Anxin Asset Management Global Investment Department stated that since the beginning of this year, the energy sector has benefited from supply-side factors such as the geopolitical crisis and insufficient capital expenditure under the global energy transformation. Oil prices have reversed, driving a significant increase in the prosperity of exploration and development sectors such as the "three barrels of oil" and other exploration and development sectors, and the stock price is also remarkable in this year's Hong Kong stock market. However, since the second half of the year, with the marginal decline in demand side expectations, oil prices have changed from to unilateral rise in to high fluctuations, and the investment opportunities of related companies will also weaken.
Yin Lei said that due to geopolitical conflicts, the energy supply and demand relationship has become more tense, and the center of energy price fluctuations has increased significantly. The traditional energy sector represented by oil, gas and coal has been in a high prosperity this year. In the medium and long term, due to insufficient capital expenditures of enterprises in the early stage, the shortage of energy supply and demand may last longer. At the same time, relevant companies actively repurchase or increase dividend ratios, driving the valuation system from cyclical stocks to value stocks. The
repurchase wave may continue
Hong Kong stocks have medium- and long-term allocation value
Haitong Securities Research report shows that Hong Kong stocks have experienced five repurchase waves since 2005. Historically, the market usually had a large decline at the beginning of the repurchase wave and its valuation was also at a low level. However, after the repurchase wave, Hong Kong stocks often stabilized and rebounded. In the medium and long term, after the repurchase wave ended, both the Hang Seng Index and Hang Seng Technology can bring good investment returns, among which the information technology sector performed the best.
Anxin Asset Management Global Investment Department believes that this round of repurchase wave will continue. After sorting out the 205 companies that have been repurchased this year, it was found that the average repurchase price of 175 of them is still higher than their current price level, indicating that the current overall valuation of Hong Kong stocks is still significantly lower than the agreed level of listed companies.
As for the overall impact of this wave of Hong Kong stock repurchase on the short-term and medium- and long-term future markets of Hong Kong stocks, Yin Lei said that the short-term Hong Kong stock market may still be affected by factors such as Federal Reserve's radical interest rate hikes, the continued escalation of the Russian-Ukrainian conflict, and Sino-US trade frictions; in the medium and long term, it is likely that it has been at a relatively bottom position, and the further downward space is limited.
Li Zhiwu is very optimistic about the future market of Hong Kong stocks. He said that for long-term investors, Hong Kong stocks have already seen extremely rare opportunities to make arrangements. First, the valuation of Hong Kong stocks is close to the historical pessimistic extreme point, and the safety margin is extremely high; secondly, this round of rare historical sharp drops gathered a series of major and concentrated negative news, which has indeed greatly dampened investor confidence. However, after many " black swan " dances, most of the impact has been reflected in the stock price, and the most violent time has passed or is about to pass. From a cyclical perspective, all kinds of negative news are flying at the bottom of the bear market, and the bull market is full of joy, but negative news will eventually pass, and dawn will eventually come. As long as you have confidence in the Chinese economy, time is likely to be a friend.
