CHINA PET FOODS(SZ:002891) Mei Ri Jing Ji Xin Wen·2026-01-25 11:05Core Viewpoint - The company Zhongchong Co., Ltd. has announced a share buyback plan in response to a significant decline in its stock price and market capitalization, aiming to boost investor confidence and facilitate the conversion of convertible bonds [3][6]. Group 1: Buyback Plan Details - Zhongchong plans to use between 100 million and 200 million yuan for the buyback, with a maximum repurchase price set at 78.00 yuan per share, which is significantly higher than the current price of 49.52 yuan [3][5]. - The buyback is expected to cover approximately 2.564 million shares, accounting for about 0.84% of the total share capital [4]. - The buyback period is set for up to 12 months from the board's approval date [5]. Group 2: Market Context and Financial Performance - The company's stock price has dropped approximately 32.90% from its peak of 73.80 yuan in June 2025 to 49.52 yuan as of January 23, 2026 [6][9]. - Despite a revenue increase of 21.05% year-on-year to 3.86 billion yuan in the first three quarters of 2025, the net profit for the third quarter fell by 6.64% year-on-year to 130 million yuan [9]. - The company faced regulatory scrutiny due to a failure to disclose changes in shareholding related to convertible bond conversions, which has added to market concerns [9]. Group 3: Strategic Implications - The high buyback price suggests that management believes the current stock price is undervalued and aims to create favorable conditions for the conversion of convertible bonds [5][6]. - The company has a strong international presence, with 64.75% of its revenue coming from overseas in the first half of 2025, and is pursuing a global strategy that includes "global R&D + North American manufacturing + global sales" [9]. - The buyback initiative is seen as a move to reassure the market amid internal performance fluctuations and external stock price pressures [6][9].