The A-share buyback market is currently polarized: reduction and cancellation occurring simultaneously. Nearly 15 listed companies have reduced holdings of their repurchased shares this year, with an increase in cancellation-style buybacks.

Reporter Liu Chuan Source: Economic Information Daily

Share repurchase as a means of market value management has shown a clear polarization in the A-share market this year: on one side, nearly 15 companies have sold previously repurchased shares, relying on “low buy, high sell” to recover short-term funds, with some companies achieving impressive returns; on the other side, the number of cancellation-style repurchase cases is expanding simultaneously, with listed companies actively reducing capital and solidifying intrinsic value.

Both buybacks and reductions this year have achieved positive returns

According to incomplete statistics, more than 10 listed companies including Huafu Fashion, Aoruid, and Hebang Biotech have successively completed reductions of previously repurchased shares or announced progress on reducing repurchased shares. From the reduction results, all these companies have realized positive gains, with companies like Aoruid, Yongyue Technology (rights protection), and Tongji Technology generally having a higher average selling price than their repurchase price.

On March 17, 2026, Aoruid (600666.SH) disclosed an update on its cumulative reduction progress, showing that by March 16, 2026, it had reduced a total of 28.41M shares of previously repurchased stock, at an average price of 3.92 yuan per share, with a total transaction amount exceeding 111 million yuan. The company’s September 2024 disclosure of the repurchase implementation results showed that, to maintain company value and shareholder interests, it had repurchased 35.72M shares, accounting for 1.29% of total share capital, with a total investment of 50.0255 million yuan, and an average repurchase price of only 1.40 yuan per share.

Compared to the average repurchase price, the average transaction price for Aoruid’s reduction this time has increased significantly, and even before fully reducing all repurchased shares, it has already gained over 50 million yuan, ranking among the top in this round of listed companies reducing repurchased shares. In terms of performance, Aoruid expects to turn a profit in 2025, with net profit attributable to the parent estimated between 120 million and 160 million yuan, ending years of losses. However, net profit attributable to the parent after non-recurring gains and losses is still expected to be between -185 million and -145 million yuan, with its main business still in loss.

Yongyue Technology (603879.SH) had repurchased a total of 4.8511 million shares from March to May 2024, accounting for 1.35% of the company’s total share capital, at an average price of about 3.11 yuan per share. On October 31, 2025, the company disclosed a reduction plan, and by February 28, 2026, Yongyue Technology had reduced 2.85 million shares through centralized bidding, about 0.79% of total share capital, at an average price of about 6.66 yuan per share, with a total transaction amount of about 18.973 million yuan. Regarding performance, the 2025 performance forecast shows that net profit attributable to the parent is expected to lose between 33.5 million and 50 million yuan, mainly due to sluggish drone sales and changes in raw material prices in the chemical sector.

Tongji Technology (600846.SH) had accumulated repurchases of about 4.4155 million shares from August to October 2024, about 0.71% of total share capital, at an average price of 7.01 yuan per share. The company disclosed a reduction plan on October 22, 2025, and by February 6, 2026, Tongji Technology had reduced all 4.4155 million repurchased shares through centralized bidding, about 0.71% of total share capital, at an average price of 13.60 yuan per share, with a total transaction amount of about 60.05 million yuan.

Fangda Carbon New Material (600516.SH) repurchased about 196 million shares from September 19 to November 4, 2024, accounting for 4.88% of total share capital, at prices ranging from 3.96 yuan to 5.48 yuan per share, spending about 100 million yuan to maintain company value and shareholder interests. In November 2025, the company announced plans to reduce no more than about 75.69 million shares of the repurchased stock, accounting for 1.88% of total share capital, with proceeds used to supplement working capital. As of February 25, 2026, the company’s dedicated securities account for repurchases had reduced about 40.26 million shares (1%), at an average price of 5.983 yuan per share, with a total transaction amount of about 241 million yuan. The reduction amount ranks among the top in this year’s buyback and reduction companies. After the reduction, the company’s dedicated securities account still holds 209 million shares (5.19%).

Acceleration of cancellation-style repurchases

Although buybacks and reductions can stabilize stock prices and protect company value, the actual “buy low, sell high” operations often raise market doubts about “market stabilization buybacks being used as arbitrage tools.” In April 2024, the State Council issued the “Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality Development of the Capital Market” (new “Guo Jiu Tiao”), elevating the importance of the capital market. The new “Guo Jiu Tiao” explicitly requires A-share companies to focus on market value management, especially emphasizing “guiding listed companies to cancel shares after repurchase according to law.”

Market analysts told reporters: “Cancellation-style buybacks refer to companies directly canceling shares after repurchase, reducing total share capital, and directly increasing earnings per share (EPS), net assets, and return on equity (ROE), benefiting all shareholders. This fundamentally eliminates arbitrage from reductions and idle treasury shares, returning buybacks to their original purpose of optimizing structure and rewarding shareholders.”

Wind data shows that in 2025, 1,495 A-share companies initiated share repurchases, with a total repurchase amount of 18.97M yuan. Industry-wise, sectors like electrical equipment, electronics, household appliances, and machinery each repurchased over 100 billion yuan. According to incomplete statistics, over 40% of the repurchase plans aimed for full or partial cancellation, up from 38.33% in 2024. For example, Midea Group’s 10 billion yuan repurchase plan will see 7 billion yuan used for cancellation; Kweichow Moutai’s 6 billion yuan repurchase will be fully canceled.

Entering 2026, this trend continues. Wind data shows that as of March 24, 2026, 356 listed companies had repurchased shares, totaling 10B yuan.

Regarding the accelerating expansion of cancellation-style buybacks, a non-bank financial team from a North China securities firm pointed out that cancellation-style buybacks align with the core guidance of the new “Guo Jiu Tiao” encouraging long-term value investment. Compared to traditional market value management buybacks and equity incentive buybacks, direct cancellation has a “tax-free dividend” effect, as investors do not bear dividend tax, and it can directly boost core financial indicators like EPS and ROE, improving valuation recovery efficiency. This is especially beneficial for industry leaders and state-owned enterprises with stable cash flows and strong performance certainty.

Another securities research report emphasized that the overall valuation of A-shares remains reasonable, and the increase in cancellation-style buybacks signifies an upgrade in corporate governance. It can optimize capital structure, avoid long-term idle treasury shares and subsequent selling pressure, and convey management’s confidence in the company’s fundamentals, forming a positive cycle of “buyback and cancellation—value enhancement—confidence boost.” With ongoing policy guidance, normalized cancellation will become a standard move for high-quality companies’ capital operations.

An East China securities team analyzed from a market impact perspective that compliant reductions and buybacks are often driven by short-term cash flow needs, with limited market recognition. In contrast, cancellation-style buybacks are irreversible value-enhancing actions that are more likely to attract institutional and long-term funds, further driving valuation differentiation in the A-share market. This will push listed companies to abandon short-term arbitrage thinking and return to the core of long-term value creation.