Caixin News Agency, March 16 (Reporter Luo Yichen) Yesterday afternoon, the State Council Information Office held a press conference, and the China Securities Regulatory Commission issued a number of new regulations, including the Opinions on Strengthening the Supervision of Listed Companies (Trial) (hereinafter referred to as the "Opinions"), to further enhance the importance of share repurchases of listed companies, and proposed to promote high-quality listed companies to actively carry out share repurchases, guide more companies to buy back and write off, enhance the effect of stable market . At the same time, it is also clear again that listed companies to cash as the consideration, the use of offer, centralized bidding method to buy back shares and write off, the amount of repurchase write-off into the dividend payment rate calculation .

The Opinion's encouragement of buybacks is timely. According to statistics, the repurchase of A- share listed companies is becoming a common practice. Since 2024, more than 800 A- share listed companies have disclosed their repurchase plans, exceeding the 2023 year. Many companies are pushing fast to buy back when their share prices are low, stabilizing investor confidence. Among them, the vast majority of companies basically start to buy back the program (after the resolution of the board of directors or the adoption of the general meeting of shareholders) as soon as it is released.

but there are also very few listed companies that are slow to act. after the shareholders' proposal or the board of directors plan is launched, the buyback progress bar has stopped at zero for a long time. some of them have not seen any movement for more than a month, and some are still standing still for three months. According to the statistics of a reporter from the Caixin News Agency, there are currently at least 7 listed companies with such situations.

7 What's the secret about the company's buyback?

From March 14th to 15th, reporters from the Caixin News Agency called the above-mentioned seven companies to understand the reasons for the "no movement" of the repurchase, and the relevant persons in charge responded with different attitudes.

Among them, Tianneng shares (688819.SH) and Huijia Times (603101.SH) are in a special situation, and their repurchase has not even entered the board of directors to consider the link, has been stuck in the shareholder proposal stage. In response, the former responded that "the management is very busy" and is expected to hold a board of directors to review the buyback in the middle and late of this month; the latter has not been connected. It has been more than three months since the relevant repurchase announcement, and Huijia Times's share price has fallen from 6.83 yuan per share to 4.30 yuan per share. But management, which claims to boost investor confidence, has been holding back.

in addition, the staff of bee assistant (301382.SZ), who did not see any movement one and a half months after the buyback plan was launched, chose to hang up the phone directly after receiving the reporter's inquiry. Puyang Huicheng (300481.SZ), whose repurchase progress has been zero for nearly three months, stressed that the repurchase is still valid and requires no additional explanation. Similarly, Zhenghai Biology (300653.SZ), which has not bought back any activity in the past three months, said that "the decision-making level may have other considerations and will feed back the concerns of the outside world."

In contrast, the following two companies admitted that the slower repurchase progress was more affected by objective factors.

Hongyuan Green Energy (603185.SH) responded that the previous fixed increase had affected the buyback progress to some extent, while Dongfang Cable (603606.SH) stressed that the buyback preparations were in place and the slower progress was mainly affected by the performance window.

According to the announcement, the repurchase validity period of the above seven companies is within 12 months after the announcement of the board of directors plan, repurchase purposes are employee stock ownership plan or equity incentive . With the exception of two companies that are still in the shareholder recommendation stage (the repurchase share price cap has not yet been determined), the latest share prices of the remaining five companies are significantly lower than the share price cap of their repurchase plans .

Beware of buybacks by listed companies

Looking at the buybacks of A- share listed companies in recent years, there are also cases in which there are plans to fail.

Take Focus Media (002027.SZ) as an example. The company had "not purchased one share" for more than half a year after the repurchase plan was released, and finally suddenly announced the termination of the repurchase plan on the grounds of changes in the objective environment.

In contrast, the buyback failure of Eastern Group (600811.SH) also drew regulatory warnings and public condemnation. The company's announcement explained that due to the deterioration of operating conditions and shortage of funds, the original repurchase funds were not in place, resulting in the original plan to 0.4 billion to 0.6 billion yuan of share repurchase into empty talk, and finally barely implemented 1 million yuan. The move was identified as "the company did not implement the repurchase in accordance with the agreement in the share repurchase report", was issued a warning letter by the Heilongjiang Securities Regulatory Bureau, the relevant responsible party was also publicly condemned by the exchange.

In the recent period, regulatory incentives for share repurchases of listed companies have increased significantly.

In December 2023, the CSRC revised the Rules on Share Repurchase of Listed Companies to relax the repurchase conditions, such as adjusting one of the trigger conditions, "the closing price of the company's shares has fallen by 30% in 20 consecutive trading days", to "20% in total", lowering the trigger threshold. In addition, it is further clarified that stock exchanges may take self-regulatory measures or disciplinary action against repurchase violations in accordance with business rules.

In the "Opinions on Strengthening the Supervision of Listed Companies (Trial)" issued by the China Securities Regulatory Commission on March 15, Article 14 is to enhance the effect of share repurchase and regulatory binding force. Promote high-quality listed companies to actively carry out share buybacks, guide more companies to buy back and write off, and enhance the effect of stable market. requires major index constituent companies to clarify arrangements for responding to buybacks and increases in situations such as short-term sharp declines in share prices. Require broken net companies that have not increased their holdings or repurchased to describe in their periodic reports relevant initiatives to improve the value of their investments.