Hong Kong–listed companies have stepped up stock repurchases in 2024, with the total buyback amount reaching HK$203.6 billion as of September 18, already exceeding last year’s full-year level.

Top companies: Tencent (HK$83.4B), HSBC (HK$30.7B), Meituan (HK$27.4B), and AIA (HK$23.9B).

Market drivers: Low valuations, strong company performance, and the need to boost shareholder returns.

Historical context: From 2020–2023, annual buybacks ranged between HK$67.9B and HK$124.6B. Tencent alone plans to repurchase at least HK$100B this year.

Expert Insights

Drew Bernstein, Co-Founder and Co-Chairman of Marcum Asia, told Jiemian News:

Two key functions: Buybacks return capital to shareholders and signal management’s belief that shares are undervalued.

Benefits: They can improve earnings per share by reducing shares outstanding and boost investor confidence, especially for technology companies entering a more mature phase with stable cash flows.

Risks: For growth companies, buybacks may also suggest a lack of high-return investment opportunities. If paired with excessive debt, buybacks could become a warning sign.

Financial firms: Commonly repurchase shares, as they are skilled at managing capital structures, provided their capital base remains strong and compliant with regulations.

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