The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that since the second half of 2026, many listed brokerage firms have intensively launched or promoted share repurchases, and important shareholders' holdings have increased and followed up at the same time. Small and medium-sized brokerage firms are the main players in this round. The share of cancellation repurchases has increased significantly, and the initiators tend to be diverse. The direct driver was a mismatch between high performance growth in the first half of the year and low sector valuations. Industrial capital was actively revised by entering the market with own capital; the nine policies encouraged repurchases and cancellations, and continued guidance on market value management guidelines to promote the normalization of cancellation-style repurchases. Cancellation repurchases permanently reduce total share capital, increase earnings per share and return on net assets, and have no subsequent selling pressure on treasury stocks, driving brokers' market value management to shift from short-term stability to long-term shareholder returns, and optimizing the shareholder return system in the long term.
CITIC Construction Investment's main views are as follows:
This round of brokerage buybacks and increases in holdings showed the following characteristics
First, the participants are mainly small to medium brokerage firms. Medium-sized institutions such as the League of Nations Minsheng, Changjiang Securities, Huaan Securities, Guojin Securities, Hongta Securities, and Zhongtai Securities are taking action intensively, and leading brokerage firms are relatively limited. The logic is that repurchases directly consume net capital, and net capital is the regulatory bottom line for core businesses such as finance and self-management. Currently, small and medium-sized brokerage firms have limited intention to expand their business, have relatively surplus net capital, and are in place to implement them. Second, the share of deregistered repurchases has increased significantly. In the past, most repurchases were based on market value maintenance and equity incentives. In this round, many companies clearly used shares to cancel and reduce registered capital, and some companies also agreed to cancel repurchased shares not used within three years in accordance with procedures. Third, the initiators tend to be diverse. The controlling shareholder's proposal, the chairman's initiative, and the increase in the shareholders' holdings were followed up simultaneously. The majority shareholders and management agreed on the company's valuation, and the repurchase and holdings increase formed a joint effort.
And why are brokerage firms intensively buying back or increasing their holdings in the near future?
The direct driving force behind this is a mismatch between high performance growth and low valuation. Performance in the first half of the year generally increased ahead, but sector valuations were at a historically low level. Industrial capital entered the market with its own capital, which actively corrected this mismatch; continued policy guidance, and tools such as repurchasing, increasing holdings and refinancing also provided low-cost financial support.
The root cause lies in the double resonance of the system and interests
At the policy level, for the first time, the nine rules of the new country incorporated repurchase cancellation into the top-level design, clearly encouraging listed companies to repurchase shares and cancel them according to law; since 2024, policies such as the Securities Regulatory Commission's Market Value Management Guidelines have further encouraged cancellation-style repurchases. The repurchase rules have lowered the threshold and cancelled the window period, paving the way for them to move from incidental actions to normality. In terms of shareholder returns, buying back and cancelling with own funds at a low valuation level is equivalent to recovering shares at a low level and is more friendly to shareholders.
In this round of brokerage buybacks, many companies clearly used shares to cancel shares and reduce registered capital
The impact is mainly on the following three aspects: First, permanently reducing total share capital, increasing earnings per share and net assets per share on the premise that profit remains the same, and passively increasing return on net assets. This is a real money return for all shareholders. Second, cancelled shares are permanently withdrawn from circulation. There is no selling pressure caused by future sales of treasury shares, which is conducive to continuing to support the valuation base. The third is to promote the market value management idea of the securities industry to shift from short-term stabilization and market protection to long-term shareholder returns, in line with the investor-centered orientation. However, it is also necessary to look at it rationally. The improvement of indicators due to cancellation repurchases is based on stable profits. If fundamentals are not supported, it is difficult to establish a continuous valuation base by reducing stocks on a limited scale alone.
risk analysis
Uncertainty of market price fluctuations; uncertainty in corporate profit forecasting; iterative technology updates.