By Tang Guhan
China's leading home appliance company, the Midea Group on Wednesday night announced that it is planning a stock repurchase program within the next twelve months.
The total repurchase value will amount up to RMB 4 billion with a price of no more than RMB 50 per share.
The move is intended to showcase the company's self-confidence in the future while considering Midea's performance in the stock markets and its financial capabilities to match the company's true value, according to Midea.
Furthermore, Midea believes it would consolidate its investors' confidence and safeguard their interests.
The upper limit of Midea's stock repurchase program would be 80,000,000 shares based on the above repurchase plan, which represents 1.2 percent of its overall shares.
Midea also noted the total assets of the company was RMB 248.1 billion as of the end of 2017. The company's net cash balance was RMB 48.3 billion. The total assets attributable to shareholders were RMB 73.7 billion. The funds used in the repurchase program will account for only 1.61 percent of its total assets, which will not exert significant influence on the company's operations.
The aggregated stock price of the Midea Group plummeted by 16.82 percent in 2018, the worst stock performance since it acquired the Guangdong Midea Electric Appliances, Co., Ltd. on Sept. 18, 2013.
The stock repurchase program is a measure that companies take to buy back a certain amount of their circulated stocks on the market and cancel them in an attempt to revive their stock prices.
Chinese property company, the Evergrande Group, also bought back 18,500,000 shares for HKD 381 million on the same day.
The total amount for stock repurchases has reached RMB 13.5 billion since the beginning of the year, according to www.chnfund.com.
