The market ushered in a large number of purchases, and China's Hongqiao (01378) repurchase sent a positive signal

In the current global capital market, market sentiment is becoming more fragile, investors' risk appetite continues to subside, and asset price fluctuations are increasing markedly under the influence of uncertain factors such as macro-cyclical shifts, intensification of geopolitical games, and repeated swings in policy expectations. However, at such a time of uncertainty, China's Hongqiao (01378) bucked the trend in the Hong Kong stock market and launched a new round of large-scale repurchases. Judging from today's market details, China's Hongqiao has already begun to act. The trading software shows that in the core buying camp, China Hongqiao's dedicated repurchase seat “CITIC Securities (HK)” is extremely active. In the intraday, this seat is densely arranged with huge purchase orders at key prices such as buying 1 and buying 2. Every time pressure surges in the market, the seat will accept orders as soon as possible. At the same time, it will also actively eat up the upper sales market from time to time. It also takes the long approach of combining low bottom support with active sweeping. The intention behind this is self-evident. Also, according to the announcement disclosed by China Hongqiao after the close of trading, on October 23, China Hongqiao spent about HK$450 million in a single day to buy back 24.026,500 shares in a large amount in the range of HK$17.80 to HK$19.11, and clearly stated that they would be cancelled.

Going back in time, in late March and early May this year, China's Hongqiao also intensively repurchased shares. Judging from the repurchase movement at the time, China's Hongqiao's repurchase characteristics were clearly continuous and large-scale. During this period, the company's single-day repurchase amount reached hundreds of millions of Hong Kong dollars over multiple trading days. A glimpse into all the news is that China's Hongqiao has now restarted the buyback, and the company loudly stated in the announcement that “further repurchases will not be ruled out according to market conditions”. The market can also expect the company to “copy” the previous repurchase method over the next period of time and work with the majority of small and medium-sized shareholders to overcome the market trough through continuous large repurchases of shares.

Zhitong Finance believes that the more foggy the market environment, the more it shows the value of strength and confidence. China's Hongqiao's intensive repurchase campaign at this time not only sends a clear signal of value to the market with real money, but also reflects the strategic strength and firm confidence of industry leaders in the midst of cyclical fluctuations.

If we want to explore the motivation of China's Hongqiao to buck the current trend and go long, of course, it all stems from extremely stable financial fundamentals at the company level. As a global leader in the aluminum industry, China's Hongqiao has maintained a healthy balance and liability structure for a long time. Under the boom cycle of the industry, China's Hongqiao has not only accumulated plenty of cash on hand, but its debt structure has also continued to be optimized. China's Hongqiao's sound financial model also gave management a high level of capital scheduling ability and financial flexibility. Thanks to this, the company was able to continue to carry out large-scale repurchases in the secondary market with ease. At the same time, this also means that no matter what kind of changes in the external environment, the company and major shareholders have sufficient “ammunition” to protect shareholders' rights and interests.

Also worth mentioning is that on the evening of October 22, Hongqiao Holdings, a core subsidiary of China's Hongqiao, also disclosed its three-quarter report. In the first 9 months of this year, Hongqiao Holdings achieved net profit of 23.294 billion yuan, a year-on-year increase of nearly 70%; net cash flow from operating activities reached 26.357 billion yuan. This set of data further confirms that China's Hongqiao infrastructure is very stable, and its core assets have strong “hematopoietic” capabilities.

In the secondary market, extreme market conditions often nurture good opportunities for the layout of high-quality assets. The author believes that the current intensive buyback of China's Hongqiao with real money is just a “pattern” for investors: at a time of market turmoil, instead of being held hostage by panic to throw out high-quality chips, it is better to follow the firm steps of industry leaders and take the initiative to seize investment opportunities in growing white horse stocks that have been mistakenly killed.