20180906-中国银河国际证券-Strategy_Share_Buyback_Review_after_1H18_Results_3页_487kb

Share Buyback Review after 1H18 Results Summary

Core Content

This report reviews the share buyback activity of Hong Kong-listed companies following the release of their 1H18 results, with a focus on companies that have resumed buybacks in the past two weeks. The analysis highlights the companies' confidence in their near-term business outlook and their potential for defensive performance, especially those with higher dividend yields.

Main Points

• Share Buyback Resumption: Companies resumed share buybacks after releasing their 1H18 results in mid-August. This activity is seen as a positive indicator of confidence in the business outlook.
• Screening Criteria: Only companies with a three-month average daily turnover exceeding US$1 million and an accumulated buyback volume of at least 0.25% of their free float are included in the analysis.
• Key Companies with Active Buybacks:
  • Lifestyle International (1212.HK): Very aggressive in buybacks, having repurchased 52.3 million shares (4.4% of free float) in the financial year. In the past two weeks, it bought back 1.45% of its free float. It offers a dividend yield of 4.26% and its share price dropped only 1.19%.
  • Yue Yuen (0551.HK): Active in buybacks, with an accumulated volume of 0.84% of its free float. It has an attractive dividend yield of 6.24%, and its share price increased by 8.2% in the past two weeks.
  • Shimao Property (0813.HK): Bought back 0.75% of its free float. It offers a dividend yield of 5.78%.
  • IGG (0799.HK): Bought back 0.25% of its free float. It offers a dividend yield of 5.70%.
  • LINK REIT (0823.HK): Active since July, with a buyback volume of 0.31% of its free float. However, its dividend yield is lower at 3.55%.

Key Information

• Dividend Yield as a Defensiveness Indicator: Companies with higher dividend yields are considered more defensive in the near term.
• Market Performance: Share price resilience or growth is noted for some of the companies, indicating market confidence.
• Discount to NAV: CK Hutch (0001.HK) is currently trading at a 38% discount to NAV, which may present an investment opportunity.
• Other Stocks of Interest: CK Hutch and Kingsoft (3888.HK) are mentioned as potentially interesting due to recent buyback activity, though they are not included in the main list due to limited trading history.

Table of Key Companies

Analysts

• Wong Chi Man – Head of Research
• Mark Lau – Research Analyst

Disclaimer

• The report is not intended for distribution to or use by any person or entity in jurisdictions where it would be illegal.
• The information is sourced from reliable but not guaranteed data.
• The report is for institutional clients and does not constitute an offer or solicitation to buy or sell securities.
• Past performance is not indicative of future results.

Equity Ratings Explanation

• BUY: Share price is expected to increase by more than 20% within 12 months.
• SELL: Share price is expected to decrease by more than 20% within 12 months.
• HOLD: No clear catalyst, and the rating may be downgraded or reinstated based on future signals.

Copyright

• No part of this material may be reproduced or redistributed without the prior written consent of China Galaxy International Securities (Hong Kong) Co., Limited.