Zheng Quan Shi Bao·2025-12-10 18:49Core Viewpoint - The Hong Kong stock market is experiencing a new wave of share buybacks, primarily led by major technology companies, which is seen as a positive signal for long-term development and financial stability [1][5]. Group 1: Buyback Activity - Since November, the total number of shares repurchased by Hong Kong listed companies has exceeded 700 million, showing significant growth compared to previous months [2]. - In December, the trend of active buybacks has continued, with over 27 million shares repurchased in just the first few trading days [2]. - Tencent Holdings has resumed its buyback program since November 18, repurchasing over 1 million shares daily, with daily buyback amounts exceeding 630 million HKD, which is higher than the previous round [2]. - Xiaomi Group has also intensified its buyback efforts, with a total buyback amount exceeding 2.9 billion HKD since November 20, accounting for more than half of its total buyback since 2025 [2]. - COSCO Shipping Holdings has initiated a new round of buybacks, accumulating over 1 billion HKD in just over a month [2]. Group 2: Leadership of Technology Companies - Major technology companies, particularly Tencent and Xiaomi, are leading the current buyback wave, with their buyback amounts ranking at the top [3]. - Other tech companies like Kuaishou and Kingsoft are also beginning to appear on the buyback leaderboard [3]. - In contrast, some non-tech companies, such as HSBC and China Hongqiao, have seen a decline in their buyback activities [3]. Group 3: Rationale Behind Buybacks - Experts suggest that companies typically choose to buy back shares when they believe their stock is undervalued [4]. - Companies should avoid buybacks during earnings blackout periods and ensure that they have sufficient cash flow without impacting normal operations [4]. - The scale and execution of buybacks are often constrained by regulatory rules and the company's financial strength [4]. Group 4: Long-term Development Signals - Share buybacks are a common practice in mature capital markets, reflecting a company's confidence in its performance and helping to stabilize market value [5]. - Buybacks can optimize a company's equity and financial structure, potentially increasing earnings per share and return on equity [5]. - The upcoming stock buyback reform by the Hong Kong Stock Exchange in 2024 will allow companies to retain repurchased shares for employee stock plans, enhancing employee motivation and aligning interests [5]. - Continuous buyback actions can signal to the market that a company's value is underestimated and its cash flow is stable, which can attract potential institutional investors [6].