BOE A To Buy Back 1 Billion Employees In One Day?

After hours on September 2, BOE a (000725. SZ) announced that the Company repurchased its shares for the first time on September 2, with 180 million shares to be repurchased, and the total payment amount was 1.033 billion yuan.

On the evening of August 28, BOE just released its buyback plan: it plans to spend no more than 2 billion yuan to buy back 250 million to 350 million shares of the company, all of which will be used to implement the company's equity incentive plan.

That is to say, in the past two trading days alone, BOE has pulled the progress bar of 2 billion repo plan to 50%.

As of the end of September 2, BOE's share price rose 3.05% to 5.74 yuan, with a total market value of nearly 200 billion yuan.

The buyback plan mentioned above was considered "sincere" at the beginning of its release. With a buyback scale of 2 billion yuan, the whole A-share is not small, and the price ceiling is far higher than the company's closing price of 5.43 yuan / share. Nowadays, BOE has implemented the buyback plan with such a large amount of money, and people in the industry lament that it is not short of money.

"Money and willfulness" is on the one hand. On the other hand, BOE's rapid implementation of buyback seems to be sending a signal to investors: it is very confident in the company's fundamentals.

According to this year's half year report, BOE achieved a revenue of 60.867 billion yuan, a year-on-year increase of 10.59%, and a net profit of 1.135 billion yuan, a year-on-year decrease of 31.95%. Although the net profit of the first half of the year is still declining, the profitability of the second quarter has obviously recovered.

In the previous two years, as the panel industry experienced a cold winter, BOE's net profit continued to decline, falling into the question of "why not make money" for a long time. However, after the adjustment in the past two years, the global LCD panel market pattern has undergone great changes, and the Korean LCD production capacity has accelerated to exit. The Chinese panel company led by BOE has ushered in significant opportunities. In the face of the recovery of the second quarter, the industry believes that the inflection point of BOE's performance has already appeared, and the inflection point of share price may also come.

Large scale Buyback program

According to the buyback plan, BOE plans to buy back 250 million to 350 million shares of the company, accounting for 0.72% to 1.01% of the total share capital of the company at a price of no more than 7 yuan / share, involving a total of no more than 2 billion yuan. The buyback period is three months from the date when the board of directors deliberates and approves the share repurchase plan.

Two trading days after the release of the plan, BOE bought back the company's shares by centralized bidding through the special securities account for repurchase for the first time on September 2. The number of A-shares repurchased was 180 million, accounting for about 0.5338% of the company's A-shares and 0.5194% of the company's total equity. The highest transaction price of this buyback was 5.79 yuan / share, and the minimum transaction price was 5.54 yuan / share The amount is 1.033 billion yuan (including commission and other fixed expenses).

It is rare for a company to implement a buyback plan in such a short period of time in the A-share market. In the past, some companies regarded buyback as a means to twist the stock price.

BOE's rapid repo has been highly praised by investors. Some people call it "violent repo". "A good company, with its words and actions, can complete half of the buyback amount in one day. It is more efficient than you can imagine. It is worth trusting." An investor left a message in a stock bar.

"The company has just released the repurchase plan, and it is expected that investors will slowly raise the share price. Now the stock price is relatively stable, and the cost of buyback by surprise will not be too high. And it shows that the company's trading volume is large, and such a large buyback will not cause big fluctuations in the market A senior investment banker said that in his view, BOE's buyback in such a short period of time is more likely to be a strategy than confidence in the company's development.

And for the panel leader BOE, 2 billion yuan is indeed a little bit of a drop in the bucket. As of June 30, the company's total assets were about 350.734 billion yuan, and the monetary capital was about 56.665 billion yuan. The buyback fund of RMB 2 billion accounts for 0.57% of the total assets of the company and 1.97% of the net assets of the shareholders of the listed company.

In addition to the equity buyback plan to be implemented, BOE's stock repurchase plan is to be implemented.

It is understood that this is BOE's first medium and long-term equity incentive plan. The incentive includes stock option incentive plan and restricted stock incentive plan. The number of incentive objects granted by the plan does not exceed 2974, including the backbone of the core technical team and management team who worked in the company (including subsidiaries) when the incentive plan was announced. Among them, R & D personnel accounted for more than 60%, and personnel under 40 accounted for nearly 80%. The source of stock is repurchase shares in secondary market.

BOE said that the purpose of share repurchase is based on confidence in the company's future development prospects and high recognition of the company's value. It plans to buy back some public shares with its own funds for the implementation of the company's equity incentive plan, so as to further improve the corporate governance structure, promote the company to establish and improve the incentive and restraint mechanism, and ensure the realization and improvement of the company's long-term business objectives The overall value of the company.

Profit turning point

BOE's confidence in the fundamentals of the company comes from its confidence in the company's large-scale and rapid buyback. While introducing the equity incentive plan, BOE has also delivered a report card of semi annual report with bright spots.

In the first half of this year, BOE achieved a revenue of 60.867 billion yuan, a year-on-year increase of 10.59%; the net profit attributable to shareholders of listed companies was 1.135 billion yuan, a year-on-year decrease of 31.95%. Although the net profit in the first half of the year was still declining, the second quarter revenue was 34.987 billion yuan, up 22% year on year and 35% month on month. The non net profit attributable to shareholders of listed companies was 326 million yuan, up 9% year on year. The month on month increase was significant.

In terms of specific products, in the first half of the year, BOE's display devices grew against the trend, with a year-on-year growth of more than 15% and a year-on-year growth of more than 10% in the area of shipment. The five mainstream products, LCD smart phones, tablet computers, laptops, monitors and TVs, have steadily ranked first in the world in terms of the market share of the display panel.

The report card was hailed as "beyond expectations" by industry insiders. "Under the background of Q3, the company is expected to release the net profit rate under the background of Q3, and the non-profit performance is expected to be good after the price rise of q23." One electronic industry analyst said.

According to Qun intelligence consulting data, as the third quarter entered the peak period of panel stock, the mainstream size prices of TV panels in July and August all rose sharply, and it is expected that panel prices will still show an upward trend in September.

The important background of this change is the great change of global LCD panel market. With the capacity withdrawal of Samsung and LGD in South Korea in 2019, the supply and demand pattern of panels will be improved, and the price discourse power of domestic panel factories will gradually increase.

Zheng Zhenxiang, an analyst in Guosheng securities electronics industry, said, "the big cycle is clear and upward. Next year, supply exceeds demand, and the certainty is strong. Under the short-term inventory cycle, the demand driven price was rapidly restored, and the closure of Korean factories at the end of the year increased the supply and demand tension, and the pressure of transfer order further promoted the upward trend of the industry. LCD has occupied the mainstream technology for a long time, and the commercialization of miniled backlight products is about to start. We firmly believe that the panel industry will go up in a large cycle. "

However, the competition is not over yet. TCL China Star, another domestic panel giant, is rising rapidly, firmly occupying the second place in the world. The industry believes that for a long time in the future, the Chinese market will usher in the ultimate PK of BOE and TCL two panel giants.

According to the exercise conditions of BOE's equity incentive mentioned above, there are clear assessment requirements for the performance targets of return on net assets, gross profit rate, market share of core products, compound growth rate of core business revenue and patent ownership of innovation business from 2022 to 2024. One of them is to keep the market share of display products ranking first.

In this context, the "equity buyback" plan of "Jingxiong" is more like a rally.

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