A-shares buyback market now shows divergence: share reduction and cancellation occurring simultaneously

Source: Economic Information Daily

As a tool for market value management, share buybacks have shown a clear polarization in the A-share buyback market this year: on one side, nearly 15 listed companies have sold the previously repurchased shares, using the strategy of “repurchasing at a low price and selling/disposing at a high price” to recoup short-term funds, and some companies have seen striking disposal profit rates; on the other side, examples of cancellation-style buybacks have expanded in parallel, with listed companies proactively reducing share capital and strengthening intrinsic value.

Buybacks and disposals within the year have all delivered positive returns

According to incomplete statistics, more than 10 listed companies, including Huafu Fashion, Oryade, and Tuskbond Biology, have successively completed the disposal of already repurchased shares or disclosed progress announcements regarding the disposal of repurchased shares within the year. Judging from the disposal results, the disposal operations of the above companies all achieved positive returns; among them, the average disposal prices of Oryade, Yongyue Technology, and Tongji Technology are generally higher than their respective average buyback prices.

On March 17, 2026, Oryade (600666.SH) disclosed a cumulative disposal progress announcement showing that, as of March 16, 2026, it had cumulatively disposed of 28.408 million shares of previously repurchased stock, with an average disposal price of 3.92 yuan per share and a total transaction amount of over 111 million yuan. The company’s September 2024 disclosure of the buyback implementation results announcement stated that, to safeguard the company’s value and shareholders’ interests, it repurchased 35.721 million shares, accounting for 1.29% of the company’s total share capital; it cumulatively invested 50.0255 million yuan in buyback funds, and the average buyback price was only 1.40 yuan per share.

Compared with its average buyback price, the average transaction price of Oryade’s disposal this time rose significantly. Even before disposing of all the repurchased shares, it had already secured more than 50 million yuan. Among all listed companies disposing of repurchased shares in this round, it ranks near the top. In terms of performance, Oryade expects to turn a loss into a profit in 2025, with attributable net profit expected to be between 120 million yuan and 160 million yuan, ending years of losses. However, non-recurring items attributable net profit is still expected to be between -185 million yuan and -145 million yuan, and the core business remains in a loss state.

Yongyue Technology (603879.SH) had previously, during March to May 2024, cumulatively repurchased 4.8511 million shares, accounting for 1.35% of the company’s total share capital, with an average buyback price of about 3.11 yuan per share. On October 31, 2025, the company disclosed its disposal plan; as of February 28, 2026, Yongyue Technology had disposed of 2.85 million shares through centralized bidding, representing about 0.79% of the company’s total share capital, with an average disposal price of 6.66 yuan per share and a total transaction amount of about 18.973 million yuan. In terms of performance, Yongyue Technology’s 2025 annual performance forecast indicates that it expects attributable net profit losses of between 33.5 million yuan and 50 million yuan in 2025, mainly due to the failure of its drone business sales to scale up and changes in raw material prices in the chemical sector.

Tongji Technology (600846.SH) cumulatively repurchased about 4.4155 million shares during August to October 2024, accounting for about 0.71% of the company’s total share capital, with an average buyback price of 7.01 yuan per share. The company disclosed its disposal plan on October 22, 2025. As of February 6, 2026, Tongji Technology had disposed of all 4.4155 million repurchased shares through centralized bidding, accounting for 0.71% of the company’s total share capital; the average disposal price was 13.60 yuan per share, and the total transaction amount was about 60.05 million yuan.

Fangda Carbon (600516.SH) repurchased about 196 million shares between September 19 and November 4, 2024, accounting for 4.88% of total share capital. The buyback price range was 3.96 yuan per share to 5.48 yuan per share, and it spent about 100 million yuan to repurchase shares to maintain the company’s value and shareholders’ interests. In November 2025, the company announced a plan to dispose of no more than about 75.69 million shares of already repurchased shares, accounting for 1.88% of total share capital; the proceeds would be used to supplement working capital. As of February 25, 2026, the company’s repurchase-dedicated securities account had disposed of about 40.26 million shares (1%), with an average disposal price of 5.983 yuan per share and a total transaction amount of about 241 million yuan. The disposal amount ranked near the top among repurchase-and-disposal companies within the year. After the disposal, the company’s repurchase-dedicated securities account still held 209 million shares (5.19%).

Cancellation-style buybacks accelerate in scale

Although buyback disposals can dampen extreme volatility in a company’s share price and maintain the value of listed companies, the real-world outcome of “buying low and selling high” often leads the market to question whether “payout-destabilizing buybacks” have been distorted into an arbitrage tool. In April 2024, the State Council issued the “Several Opinions on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Capital Market” (the new “Nine Provisions”), raising the importance of the capital market to a new height. The new “Nine Provisions” clearly states that A-share companies should make market value management a priority, especially emphasizing “guiding listed companies to依法注销 after repurchasing shares for cancellation according to law.”

Market analysts told reporters: “Cancellation-style buyback” refers to a process in which a company repurchases shares and then directly cancels them through capital reduction, reducing total share capital and directly increasing earnings per share (EPS), net assets, and return on net assets (ROE). This benefits all shareholders, and at the root eliminates disposal arbitrage and idle treasury shares, returning buybacks to their本源 of optimizing structure and rewarding shareholders.”

Data from Wind shows that in 2025, 1,495 A-share companies initiated share buybacks, with a cumulative total buyback amount of 142.736 billion yuan. From an industry distribution perspective, industries such as electric power equipment, electronics, household appliances, and machinery equipment all had buyback amounts exceeding 10 billion yuan. According to incomplete statistics, more than 40% of buyback plans are intended for full cancellation or partial cancellation, further increasing from 38.33% in 2024. For example, in the buyback amount of 10 billion yuan by Midea Group, 7 billion yuan will be used for cancellation; in the buyback of 6 billion yuan by Kweichow Moutai, all the repurchased shares will be used for cancellation.

Entering 2026, this trend continues. Wind data shows that as of March 24, 2026, there were 356 listed companies that had repurchased shares, with a combined buyback amount of 18.189 billion yuan.

In response to the trend of cancellation-style buybacks accelerating in scale, a non-banking financial team at a North China brokerage pointed out that cancellation-style buybacks align with the core orientation of the new “Nine Provisions,” which encourages long-term value investment. Compared with traditional market value management buybacks and buybacks linked to equity incentives, direct cancellation has an “exempt dividends” effect: it does not require investors to bear dividend-related taxes, and it can directly enhance core financial indicators such as EPS and ROE. It also has higher efficiency in transmitting value re-rating. This is especially beneficial for industry leaders with stable cash flows and strong business certainty, as well as listed companies of central state-owned enterprises.

In addition, another brokerage research report emphasized that currently the overall valuation of A-shares still remains within a reasonable range. The increase in cancellation-style buybacks is an important sign of upgrades in corporate governance by listed companies. It can optimize the share capital structure, avoid long-term idleness of treasury shares and the downward pressure from subsequent disposals. At the same time, it can transmit to the market management’s firm confidence in the company’s fundamentals, forming a positive loop of “repurchase and cancellation—value improvement—confidence boost.” Going forward, as policies continue to guide, routine cancellations will become the standard mode of capital operations for companies with strong performance.

An investment strategy team at an East China brokerage analyzed the impact on the market and said that compliant disposals and buybacks are mainly driven by companies’ short-term cash flow needs, and market recognition is limited. Meanwhile, cancellation-style buybacks are irreversible value-enhancing actions. In the long run, they are more likely to win favor from institutional capital and long-term investors. The divergence between the two types of buybacks will further drive valuation differentiation in the A-share market, forcing listed companies to abandon short-term arbitrage thinking and return to the本源 of long-term value creation. (Source: Economic Information Daily)

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