Shanghai Weir Semiconductor Co., Ltd. (hereinafter referred to as "Weir shares", 603501) intends to repurchase shares with the company's own funds of not less than 0.5 billion yuan (inclusive).

On August 16, Weir shares issued the ''Repurchase Report on Share Repurchase by Centralized Auction Tras'', stating that it is comprehensively considering the company's operating conditions, business development prospects, financial conditions, future profitability and other factors Under the circumstances, it is planned to use its own funds to use centralized bidding transactions to repurchase some of the company's RMB ordinary shares (A shares) that have been issued in China, and used to implement employee stock ownership plans or equity incentives.

"the implementation of share repurchase within the scope of the use of funds not exceeding the upper limit of 1 billion yuan will not have a significant impact on the company's business activities, profitability, financial situation, research and development, debt performance ability and future development." Weir shares said.

On the evening of August 14, Weir released its results for the first half of 2023. During the reporting period, the company's revenue and net profit both declined to a certain extent, of which the net profit dropped by more than 90%.

As of the close of trading on August 16, Weir shares closed at 88.05 yuan/share, down 4.46 percent.

It is worth mentioning that a number of listed companies have recently issued buyback announcements intensively. According to the incomplete statistics of surging news reporters, since August, 45 listed companies have issued buyback related announcements, of which the announcements in the past four trading days are particularly concentrated, with as many as 30.

the repurchase amount shall not be less than 0.5 billion yuan

Specifically, the total amount of funds for this repurchase of Weir shares is: not less than 0.5 billion yuan (inclusive) and not more than 1 billion yuan (inclusive); the repurchase period is from the date of approval by the board of directors to September 28, 2023.

in terms of the repurchase price range, Weir shares announced that it was not higher than 100 yuan/share (inclusive). At the same time, the repurchase price ceiling is not higher than 150 percent of the average trading price of the Company's shares in the 30 trading days prior to the adoption of the repurchase resolution by the Board of Directors.

"under the condition that the total number of shares repurchased by the company does not exceed 10% of the total 1.183 billion shares issued by the company as of August 15, 2023, and the price of the repurchased shares does not exceed 100 yuan per share, if calculated according to the lower limit of the repurchase amount and the upper limit of the repurchase price, the number of shares repurchased this time is 5 million shares, accounting for about 0.42 per cent of the company's current total share capital." Weir shares pointed out.

Weir's share announcement further pointed out that if measured according to the upper limit of the repurchase amount and the upper limit of the repurchase price, the number of shares to be repurchased is 10 million, accounting for about 0.85 of the company's current total share capital. The specific number of repurchases and the proportion of the Company's total share capital in this repurchase shall be based on the actual repurchase of the Company when the repurchase is completed or the repurchase implementation period expires.

In terms of the purpose of the proposed share repurchase, Weir said in the announcement that all of the shares repurchased will be used for the subsequent implementation of the employee stock ownership plan or equity incentive.

"The repurchased shares are intended to be used for employee stock ownership plans or equity incentives at an appropriate time in the future and will be transferred within three years after the date of the share repurchase result and share change announcement. The Company has not yet formulated a clear employee stock ownership plan or equity incentive plan, and if the Company fails to use the repurchased shares within three years after the date of the share repurchase result and share change announcement, the unused repurchased shares will be canceled." Weir shares said.

In terms of impact, Weir said that as of June 30, 2023, the company's total assets were 37.528 billion yuan, the total monetary funds were 5.809 billion yuan, and the net assets attributable to shareholders of listed companies were 18.949 billion yuan. According to the financial data of June 30, 2023, the maximum amount of repurchase funds accounts for about 2.66 of the company's total assets and 5.28 of the net assets attributable to shareholders of listed companies.

"According to the company's current operating, financial and future development plans, the company believes that the implementation of share repurchases within the scope of using funds not exceeding the upper limit of 1 billion yuan will not affect the company's operating activities, profitability, financial status, research and development, and debt fulfillment. Ability and future development have a significant impact." Weir shares said.

Weir shares also emphasized that within the predictable repurchase price range, the company's equity distribution meets the company's listing conditions and will not affect the company's listing status.

First-half net profit down more than 90%

on the evening of August 14, weir shares released its results for the first half of 2023: during the period, due to the continued weakness of the consumer electronics market, the company achieved operating income of 8.858 billion yuan, down 19.99 from the same period last year, of which the company's business accounted for the largest proportion. Revenue from semiconductor design business reached 7.39 billion yuan, down 18.84 from the same period last year. Net profit attributable to shareholders of listed companies was 0.153 billion yuan, down 93.25.

In terms of business, Weir's semiconductor product design business consists of three major business systems: image sensor solutions, touch and display solutions, and analog solutions.

among them, the image sensor solution business realized operating income of 6.216 billion yuan, accounting for 70.40 of the main business income, down 14.82 from the previous year; the touch and display solution business realized operating income of 0.66 billion yuan, accounting for 7.48 of the main business income, down 44.40 from the previous year; the simulation solution realized operating income of 0.514 billion yuan, accounting for 5.82 of the main business income, a decrease of 17.17 percent over the previous year.

Regarding the decline in the company's performance, Weir said that since 2023, the impact of the geopolitical and macroeconomic situation has continued, and the overall downstream demand is still showing a relatively sluggish state. At the same time, due to the mismatch between supply and demand caused by high inventory at the end of the industrial supply chain, the prices of some products are under pressure in the process of inventory removal, and the gross profit margin level is greatly affected.

However, Weir shares stressed that although the overall demand for smartphones is still weak, benefiting from the smooth progress of downstream inventory de-stocking and the active adjustment of the company's product structure, the company's product revenue from the mobile phone market has shown a trend of significant improvement from the previous month.

"During the reporting period, the company's image sensor business revenue from the smartphone market fell from 3.194 billion yuan in the first half of 2022 to 2.727 billion yuan, a decrease of 14.61 percent from the same period last year and an increase of 23.76 percent from the second half of 2022." Weir shares said.

Weir shares further pointed out that with the mass production and delivery of the company's new image sensor products above 50 million pixels in the third quarter of 2023, the company expects that the product revenue from the mobile phone market will achieve steady growth, and the optimization of product structure will help the company increase the value and profitability of related products.

Listed companies have recently issued intensive repurchase announcements

in addition to weir shares, on the evening of August 16, five listed companies, including mailander (688273), jinghuawei (688130), polytechnic navigation (688282), otel biology (688606) and huashi testing (300012), issued announcements to buy back shares or received proposals from actual controllers such as the chairman of the board of directors.

according to the incomplete statistics of surging news reporters, since August, 45 listed companies have issued buyback related announcements.

on August 16, four companies, including Guanhao Hi-Tech (600433) and Tianjin Pulin (002134), issued buyback announcements. On August 15, Microlight (002801) and Nanjing Julong (300644) all issued repurchase reports.

on August 12, 10 listed companies, including lexin technology (688018), huaheng biology (688639) and xiangyu medical (688626), issued a buyback or the chairman's proposal for the company to buy back.

It is worth mentioning that the listed companies that issued repurchase related announcements in the past four trading days (August 11-16) are particularly concentrated, with as many as 30, accounting for 67%.

In contrast, in early August, only dozens of companies such as Jimin Medical (603222), Yuntianhua (600096), and Dayang Electric (002249) issued buyback announcements.