(Yicai) Dec. 12 -- Shares of Poly Development and Holdings Group jumped after China's largest property developer by sales said it plans to buy back up to CNY2 billion (USD278.7 million) worth of shares, and its parent company and major shareholder intends to invest up to CNY500 million (USD69.7 million) to hike its stake.

Poly [SHA: 600048] closed up 7.6 percent at CNY10.34 (USD1.44) as of 2.0.5 p.m. in Shanghai today. The stock has nearly halved in the past one and a half years, dragged down by the sluggish performance of the Chinese real estate industry. The company's price-to-book ratio was only 0.6 percent based on yesterday's closing price of USD9.61 (USD1.34).

The board of directors approved a plan to buy back between CNY1 billion and CNY2 billion worth of Poly shares at a maximum price of CNY15.19 apiece, a premium of about 58 percent over yesterday's closing price, within the next three months to rectify the firm's stock price that severely deviated from the actual value, the Beijing-based developer said in a statement late yesterday.

Share buybacks remove some of a publicly traded company's shares from the stock market, with the aim of shoring up the price.

The stock repurchase will not affect Poly's total share capital, the firm noted, adding that if it fails to sell the repurchased shares within three years after acquiring them, the unsold part will be canceled, resulting in a capital reduction.

Poly announced a similar share buyback plan in August 2021 when its stock fell to CNY8.57. As a result, the shares rebounded and returned on a growing path until April last year, when the whole industry began to struggle.

Moreover, Poly also announced yesterday that its actual controller China Poly Group plans to hike its stake in the property developer by up to CNY500 million through the secondary market in the next 12 months, with the maximum purchasing price setting at CNY15.19 apiece.

Poly is the only listed Chinese real estate firm to have announced share repurchase plans. An industry insider told Yicai that other listed developers cannot follow Poly's footsteps in trying to boost their stock prices because most of them are cash-strapped.

Editors: Tang Shihua, Futura Costaglione