Buyback is not an unfamiliar word for the capital market. When a listed company makes a buyback, on the one hand, it means that the management and major shareholders have stronger confidence in the future development and intrinsic value of the company, on the other hand, it is also the embodiment of the abundant cash flow of the listed company.

Therefore, when the stock price performance of listed companies is not satisfactory, buyback has also become a good use of managers to boost stock prices and show confidence. However, as the ancients said, "one encouragement, then decline, and third exhaustion". If the same method is used more, the market will not buy it all the time.

　　More than 900 companies have bought back more than 100 billion yuan this year.

Since the beginning of this year, the popularity of A-share companies to buy back shares has been rising, and large buybacks have also appeared frequently. Data show that by the close of trading on November 9, listed companies have issued a total of 1735 share repurchase plans so far this year. Of these, 1391 have been implemented or completed. More than half of the buybacks are intended for equity incentives.

As of November 10, 914 A-share listed companies have implemented buybacks during the year, with a total repurchase amount of 114.883 billion yuan, an increase of 106.26% over the same period last year. Among them, there are 22 large-scale buybacks of more than 1 billion yuan that have been completed or are being implemented.

In addition, judging from the situation in November, another 19 A-share companies issued share buyback plans. Among them, there are 12 companies with a minimum amount of repurchase funds exceeding 100 million yuan, while Zhengtai Electric Appliance and Dongfang Yuhong, a "waterproof grass", have a minimum repurchase amount of more than 1 billion yuan. A few days ago, Dongfang Yuhong just announced that the company has completed its first buyback, with a total transaction amount of 30.0131 million yuan.

　　The home appliance industry has become the "hardest hit area" of buyback.

Judging from the situation since the beginning of this year, the large-scale stock buybacks of many listed companies have not significantly changed the downward trend of stock prices, especially in the home appliance industry. Gree Electric Appliances, which makes investors "punch hard" every day, is a typical representative.

On November 11, the company announced that the second phase of the repurchase shares had been cancelled, involving more than 100 million shares. Up to now, Gree Electric Appliance has won the "Repurchase King" since this year with a total repurchase amount of 21.818 billion yuan, and has set a historical record for the annual buyback amount of A shares. It is worth noting that Gree Electric Appliances is still the buyback king in 2020, with a total repurchase amount of more than 5.1 billion yuan for the whole year.

However, the 21.8 billion super buyback still failed to prop up Gree's share price. Gree's share price has been falling since it hit a new high of 66.79 yuan per share at the end of last year and just hit a new low of 34.10 yuan a few days ago, breaking the hearts of a number of investors.

Midea, another leading company in the home appliance industry, has a similar situation. Since the beginning of this year, Midea has bought back a total of 174 million shares through collective bidding, with a total repurchase amount of 13.7 billion yuan. Last year, the company was also a big buyer, with a total repurchase amount of more than 2.9 billion yuan. The 10 billion buyback also failed to save Midea's share price, which has fallen more than 30 per cent since hitting a high of 106.4 yuan in February.

　　The buyback volume of A-share companies is expected to continue to grow.

On the whole, Gree Electric Appliances and Midea took the first and second place on this year's buyback list with a repurchase volume of 10 billion yuan. As of November 10, Ping An Insurance had bought back about 72.2659 million A shares through centralized bidding, and the total amount of funds paid was about 3.63 billion yuan, ranking third on the list. In terms of stock prices, the performance is also not very satisfactory. Investors gnash their teeth every time they fall, and they should always cherish the "safety of $50".

In addition, Baosteel, China Unicom, Gale, Haier Smart Home, Guodian Electric Power, Yonghui supermarket, SAIC and other companies have also completed large buybacks of more than 1 billion yuan, occupying the top 10. BOE A has also bought back about 249 million shares since the beginning of this year, with a total investment of 1.359 billion yuan.

At present, the buyback volume of A-share listed companies is at an all-time high, and it is expected that with the continuous improvement of policies and the strengthening of buyback efforts of listed companies in the future, there is still room for further growth.

　　The company's huge repurchase cannot escape the withdrawal of the share price.

Perhaps because of the market style, listed companies have made a lot of repurchases, but they have not been able to save the stock price, and even "the repurchase has been tied up all the time". The latest share prices of many listed companies are far below the average repurchase price. According to the list of companies with buybacks of more than 100 million yuan, 10 shares are discounted at a discount of more than 30%, 10 shares at a discount of 20% to 30%.

Specifically, Jiafa Education has the highest discount. The stock has bought back more than 8 million shares this year, with a repurchase amount of more than 120 million yuan, and the average repurchase reference price is more than 14 yuan. The latest price is 7.94 yuan, with a discount of more than 43 percent.

In addition, Bohui Paper, New Hope, Twin Towers Food, Gree Electric Appliances, Onli Education, Zhongshun Jierou, Boss Electrical Appliances and other stocks also have a large pullback. Listed companies buy back shares across the board "tied up", it can be described as "losing the husband and losing the soldier".

　　Why does the A-share market "fall as it buys back"?

There are many benefits for listed companies to buy back shares, which can enhance earnings per share for shareholders and boost investor confidence for the market. In the US stock market, the slow bull that lasted for more than a decade after the 2008 financial crisis has something to do with large buybacks by blue-chip companies. But why is the buyback counterproductive in the A-share market? "the more you buy back, the lower you fall" has almost become a curse.

In the final analysis, it is because A-share listed companies focus too much on the short term, buybacks are too utilitarian, and they always occur in the stage of stock price collapse, almost telling investors that the purpose of buybacks is to boost stock prices. Want to use this to boost market confidence, so that investors holding shares do not sell, but the more investors worry about whether there is something wrong with the company.

In addition, another important reason for the decline of some white horse stocks since the beginning of this year is that they have risen too much and their valuations are too high. For stocks that are in the channel of decline, no matter how they buy back, it is also a praying mantis. After all, the proportion of buyback funds in the total transaction amount is relatively low.

Judging from these white horses, which are getting lower and lower, most of them are concentrated in the consumer and pharmaceutical industries, such as home appliances, food, daily necessities and so on. these stocks broke out in the epidemic environment last year, and their stock prices basically rose a lot. For example, Midea rose 69% last year, Mindray Medical rose 134%, Zhongshun Jierou rose 64%, Zhongju High-tech rose 69%, and so on. Many stocks have been seriously overdrawn in the next 1-2 years, even if the company buybacks frequently, it is difficult for investors to see the upward trend in the short term.