Positive Signal! Hong Kong Stocks See New Wave Of Buybacks Led By Major Technology Firms

Since November, the Hong Kong equity market has entered a renewed phase of share repurchases, with leading technology companies taking a prominent role in driving the activity. Market observers told Securities Times that active buybacks can improve capital and financial structures, reinforce corporate foundations, and signal management’s confidence in long‑term business prospects.

According to Wind data, Hong Kong‑listed issuers repurchased more than 700 million shares in November, a marked increase from the monthly totals recorded in the prior months. From August through October, monthly repurchase volumes were 260 million, 530 million, and 530 million shares respectively. The buyback momentum extended into December, with repurchases exceeding 270 million shares in the first trading days of the month alone.

Tencent Holdings (00700.HK) resumed a fresh round of repurchases on November 18 and has maintained daily purchases since then. In the current program, the company has repurchased in excess of one million shares on each trading day, with daily cash outlays surpassing HKD 630 million—materially larger than its previous repurchase cadence, when daily volumes were around 800,000 shares and daily spending hovered near HKD 550 million. Xiaomi Group‑W (01810.HK) initiated a new continuous repurchase program on November 20; in under a month the company repurchased shares totaling more than HKD 2.9 billion, representing over half of its cumulative repurchases for 2025 and indicating a clear intensification of buyback activity. COSCO Shipping Holdings (01919.HK) also launched a renewed repurchase effort at the end of October, executing daily purchases that have aggregated to more than HKD 1 billion in just over a month after a roughly six‑month pause.

This cycle differs from prior waves in that technology leaders have assumed a more dominant position. Since November, Tencent Holdings and Xiaomi Group have consistently ranked at the top of buyback lists by amount, while other technology names such as Kuaishou‑W (01024.HK) and Kingsoft (03888.HK) have begun to appear more frequently among active repurchasers. By contrast, several non‑technology issuers have reduced repurchase activity. HSBC Holdings (00005.HK), which previously conducted frequent buybacks and often ranked second in daily repurchase amounts, has not repurchased shares for over a month. China Hongqiao (01378.HK) paused repurchases since late October, and Anta Sports (02020.HK) has not repurchased shares for more than two months.

Market practitioners generally view repurchases as opportunistic actions taken when management judges the stock to be undervalued. Yu Yang, deputy director of the Institute of Financial Development and State‑Owned Enterprise Research at the China (Shenzhen) Comprehensive Development Research Institute and a certified international investment analyst, told Securities Times that companies typically execute buybacks when share prices are materially below intrinsic value, while avoiding blackout periods around earnings releases to mitigate regulatory risk. He added that repurchases should be funded from available cash and must not impair normal operating or investment activities.

Yu noted that the scale and timing of repurchases are constrained by regulatory frameworks, corporate liquidity and reserves, and the objective of stabilizing market sentiment and share prices. Large, well‑capitalized firms are able to implement more substantial repurchase programs, whereas smaller issuers tend to adopt modest, phased repurchases to avoid straining working capital.

In mature capital markets, share repurchases have become a common mechanism for companies to demonstrate confidence, support market valuation, and share value with investors; Hong Kong is following this global practice. Zhang Zhiwei, chief economist at Pinpoint Asset Management, observed that buybacks are a visible expression of management’s confidence in future performance, citing the demonstrable impact of repurchases in U.S. markets.

From a corporate governance and financial perspective, repurchases can deliver several benefits when executed prudently. Canceling repurchased shares reduces total share count and, with unchanged aggregate earnings, raises earnings per share and return on equity, thereby improving financial ratios and investor appeal. The Hong Kong Stock Exchange’s 2024 treasury share reforms permit companies to retain repurchased shares for employee share plans or executive incentives, which can align management and employee interests and support long‑term retention. Repurchases can also increase ownership concentration, raising the cost of hostile takeovers and helping to preserve control stability.

Consistent repurchase programs convey positive signals about valuation and cash‑flow strength, which can stabilize existing investor sentiment, reduce selling pressure, and attract institutional buyers—thereby improving a company’s market reputation and facilitating future capital operations. However, Yu cautioned that repurchases are most effective when accompanied by genuine improvements in business fundamentals. If a company relies solely on buybacks to prop up its share price while underlying operations stagnate and profitability declines, the stock will ultimately revert to its intrinsic value once repurchase resources are exhausted. Excessive repurchasing can also deplete funds needed for strategic investment and growth, exacerbating long‑term challenges. Repurchases should therefore be treated as a complementary tool, deployed alongside initiatives that enhance business performance and profitability.