During the year, 323 A-share listed companies implemented repurchases of pharmaceutical and biological enterprises to buy back more than 6 billion yuan.

Author . . . Mu Mu share repurchase refers to the listed company through a certain procedure to buy back the issue or flow of the company's shares, as a listed company in the stock price is undervalued when the active change of capital structure of the defensive behavior, the main purpose is to maintain the stability of the company's share price.
a total of 323 listed companies have implemented share repurchases since september 20, according to Tonghuashun iFinD.
, the buy-back of enterprises mainly concentrated in pharmaceutical biology, chemicals, electronics, machinery and equipment, computers and other industries.
especially in the pharmaceutical and biological industry, the largest number of buy-back enterprises, the number of 39;
the following specific look at the biopharmaceutical industry enterprises share repurchase situation.
Chart 1: Number of pharmaceutical and biological enterprises in various industries announcing the progress of repurchase as of September 20, 2020 Source: Tonghuashun iFinD, Zhongkang Industrial Capital Research Center Chart 2:39 Pharmaceutical Bio-Enterprise Segment Distribution Source: Tonghuashun iFinD, Zhongkang Industrial Capital Research Center 1, the number and amount of repurchases in 39 enterprises in the share repurchase, the cumulative total number of shares repurchased is 530,198,676 shares, the total amount of 6,097 million yuan.
, the share repurchase accounts for the highest proportion of the company's shareholding, is the completion of the repurchase of The State Pharmaceuticals.
, the cap on the number of shares that Xinbang Pharmaceuticals plans to buy back is as high as 10 per cent for employee shareholding plans or equity incentives.
the highest amount of buybacks was in Dongsan, with a payment of 1 billion yuan.
Figure 3: Repurchase share ratio and repurchase payment of the top five enterprise sources: Tonghuashun iFinD, Zhongkang Industrial Capital Research Center 19 repurchase completed enterprises (not including Dongcheng Pharmaceuticals) cumulative repurchase of shares of 374,309,317 shares, a total amount of 3.38 billion yuan.
From the completion of the number of share repurchases completed by these repurchases, 5 did not reach the minimum number of repurchased shares, the completion rate was between 50% and 100%, 10 completed the number of repurchases, and 4 over-planned repurchases, of which Huada Gene and Colum Pharmaceuticals repurchased shares Between 100% and 110% of the repurchase limit, Tonghua Dongbao and a pint of repurchase shares reached 142.48 percent and 166.39 percent of the repurchase limit, respectively, far exceeding the planned amount, although the funds used for the repurchase are in the plan.
Chart 4:20 Repurchase Of The number of shares repurchased by companies that have completed repurchase Sources: Tonghuashun iFinD, Zhongkang Industrial Capital Research Center 2, repurchase purposes From the specific purpose of share repurchase, these 39 enterprises repurchase shares are mainly used for employee shareholding plans, equity incentive plans, conversion of convertible corporate bonds issued by listed companies, write-off of the reduction of registered capital of the company.
nearly 90 per cent of the 39 companies buy back shares are used as employee shareholding schemes or equity incentive schemes.
Of course, there are a few enterprises to buy back the purpose is simply to reduce capital or convert listed companies issued convertible corporate bonds, such as Lizhu Group share repurchase write-off is to protect the share price and shareholder interests, thicken the company EPS;
Chart 5: Share Repurchase Purpose (a listed company may have multiple uses for share repurchase) Source: Tonghuashun iFinD, Zhongkang Industrial Capital Research Center In fact, combined with the situation of enterprises and the market as a whole, the real reason for most companies to buy back is to feel that the company's share price is too low, in order to raise the share price, which is the most common and direct purpose of repurchase.
compared with other sectors in the pharmaceutical and biological sectors, generics companies and Chinese medicine companies tend to underperform in the stock market, so it is normal for buy-back companies to buy back more of these two types of enterprises.
Especially in times of economic downturn or stock market downturn, companies may use buybacks to pull up share prices, such as Dong'a Gum (a sharp drop in first-quarter results), Xinlitai (core product flow label), etc., are in the case of continued low share prices, the purpose is to support the share price through this operation.
Of course, some companies may want to raise their share prices first because of capital operation plans such as new financing or equity deals, while a few are in a rapidly developing phase and have ample cash flow, and are more confident about their own development in the coming years, so they want to buy the shares at a smaller cost and then have the flexibility to deal with them later."
3, repurchase progress share repurchase usually through the board of directors plan, the general meeting of shareholders approved (or failed), implementation, stop implementation and complete the repurchase process.
relevant statistics, the average time from the announcement of the board's plan to the completion of share repurchase takes 173 days.
Specific to the current buy-back progress of pharmaceutical and biological enterprises, Kyushua Tong, Berry Gene, Lizhu Group, Renfu Pharmaceuticals, Yunnan White Pharmaceuticals and other 16 in the implementation of repurchase, Dongsian, Huada Gene, Colum Pharmaceuticals, Tonghua Dongbao and other 20 buy-back completed, DongA Gum, Hanyu Pharmaceuticals, Health Yuan 3 stop buy-back.
Figure 6: Repo Progress Source: Tonghuashun iFinD, Zhongkang Industrial Capital Research Center Repurchase termination for a number of reasons, such as changes in the external environment, the company has other plans or repurchase failed to meet the target.
it is understood that the East A gum in the first quarter of last year reported a sharp decline in earnings, the stock price followed by a sharp decline in the background to implement a buyback.
the buyback failed to stabilize the share price, so it decided to end the buyback and put money into production and operation.
also said that due to the impact of the new crown pneumonia epidemic, combined with the company's actual operating situation, in order to better play the maximum role of funds in production and operation, in order to strive for better performance for shareholders to create greater value, after careful consideration decided to terminate the implementation of the company's share repurchase matters.
and Hanyu Pharmaceuticals said that due to the external market environment and other major changes, under the current circumstances to continue to promote share repurchase matters is no longer in line with the company's current development strategy, not in the interests of the company and all shareholders.
health dollar is because the repurchase will affect the company's non-public issue of shares to advance, so the termination of the repurchase.
note that among the companies that completed the repurchase, Dongcheng Pharmaceuticals' cumulative repurchase was 0 shares.
According to the company's announcement, the company from the disclosure of the Repurchase Report to the end of the repurchase period, only five trading days of in-market share price below the repurchase limit of 10.50 yuan / share, and the company's buy-back time window is very small, so no share repurchase work.
the company disclosed the buyback report, Dongcheng Pharmaceuticals' share price also soared, becoming one of the few stocks to double in 2019.
the company staged a zero buyback, making one wonder if it was just trying to borrow the name of the buyback, not really wanting to buy it back.
of these 39 enterprises, four have adjusted their repurchase programs, namely, ST Jitang, People's Fu Pharmaceuticals, Xinlitai and Zhongheng Group.
expected that the buyback program may not be completed within the original time, so the buyback deadline was extended from March 5 to December 31 this year.
However, according to the company's repurchase progress announcement, from June last year to the end of August this year, the number of shares repurchased by the company has been 220,200 shares, has paid a total amount of 991,900 yuan, the repurchase basically no progress.
is similar to that of st Jitang, and People's Fu Pharmaceuticals has extended the buyback time.
Unlike the first two, Xinlitai adjusts the share price cap, which shows that the company is fully confident in its performance and intropositive value, while Zhongheng Group adjusts the content of the entire repurchase plan, transforming the purpose of the repurchase from a capital reduction or other means to an equity incentive plan, and fine-tuning the repurchase data and amount.
4. Conclusion Theory is that share repurchases can reduce the number of shares outstanding outside listed companies, thereby boosting earnings per share (EPS), which releases favorable signals, boosts market confidence and boosts share prices.
However, it is too late, the most important use of funds is to invest in enterprises' medium- and long-term capital projects, excessive buy-back is not conducive to the long-term development of enterprises, in addition, although it has pushed up the stock price, but also to a certain extent contributed to the formation of a bubble in the market.
, do not rule out some companies "twisted buyback" to pull up the share price.
, in this ever-open capital market, listed companies can use buybacks to influence share prices and adjust equity, but this also puts higher demands on investors' ability to analyze and identify.
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