On the evening of December 8, Yili Co., Ltd. issued the "Repurchase Report on the Repurchase of Company Shares through Centralized Bidding Transactions". The repurchase proposal was implemented. The repurchase of shares and will be cancelled and the company's registered capital will be reduced.
Among them: the repurchase price of
does not exceed RMB 46.83 per share, and the current share price of 31.99 per share; the total amount of repurchase funds of
is not less than RMB 1 billion (inclusive) and does not exceed RMB 2 billion (inclusive).
Repurchase and cancellation is a common practice for large blue-chip companies in the world when their stock prices are undervalued. By reducing share capital through repurchase and cancellation, the company's single share income will be increased, the company's stock price will be more competitive, and can give shareholders greater returns.
A shares A shares The real stock repurchase and cancellation of listed companies is relatively small. The purpose of most companies is to implement employee stock ownership plans or equity incentives. In fact, the total number of issued shares remains unchanged and does not benefit the real original shareholders.
Although compared with the ExxonMobil spent $50 billion to repurchase shares in the next three years, the Yili shares’ repurchase plan of RMB 1 billion to RMB 2 billion is like a drop in the bucket, but it sends a positive signal that the stock price is undervalued, and for the original shareholders, mosquito legs are also meat.
Sinopec announced on November 25, 2022 that the company completed the repurchase of 442.3 million shares of the company's A-share shares, with an average repurchase price of RMB 4.27 per share, and the total amount of funds used was RMB 1.888 billion. After the company's repurchase announcement was released, the company's stock price rose from 4.38 yuan to 4.65 yuan in the short term, and then fell back again. The repurchase seems to have a certain short-term stimulation effect on the stock price, but it must be the market decision in the end.
Compared with some listed companies that have been undervalued in the media but have no actual actions, Sinopec can repurchase shares and cancel all of them. Although the quantity and amount are small, it is undoubtedly a conscientious listed company.
Yili shares’ repurchase cannot be compared with 9.315 billion in sales expenses in in terms of quantity and amount, but it also means that the company still needs to make a difference.
As a leading dairy product company in A-shares, Yili shares have stable performance and have maintained an upward trend in revenue and attributable net profit in recent years.
Yili Co., Ltd. currently has a total market value of 204.7 billion yuan, corresponding to a dynamic price-to-earnings ratio of 19.05 times. The company's stock price fell from 50 yuan per share at the beginning of 2021 to 32 yuan per share, a drop of 36%. The company believes that its value of is underestimated to a certain extent. In order to boost market confidence, the company's shareholders' meeting passed a 2 billion yuan repurchase plan.
But whether the company's stock price is undervalued and whether the market can agree with the repurchase plan is ultimately up to the market.
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