Chinese Giants Go All-In: “Battery King” CATL Leads Massive Wave of Share Buybacks Signaling Strong Confidence

May 07, 2025, 08:17 AM

A significant wave of share buybacks initiated by leading Chinese companies, including the “Battery King” Contemporary Amperex Technology Co. Limited (CATL), is injecting a fresh dose of optimism into the market, showcasing strong confidence in their future prospects and a commitment to shareholder value.

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CATL Unleashes Powerful Repurchase Program: What’s Driving the “Battery King”?

Contemporary Amperex Technology Co. Limited (Ningde Shidai 宁德时代), famously known as CATL or “Ning Wang” (宁王), is making serious moves.

The company announced that its board greenlit a substantial share repurchase plan back on April 7, 2025.

Here’s the deal:

• Budget: A hefty ¥4 billion to ¥8 billion RMB (that’s roughly $554 million to $1.108 billion USD).
• Method: Repurchasing shares through centralized bidding.
• Purpose: These shares are earmarked for equity incentives or employee stock ownership plans – a smart way to reward and retain talent.

CATL Buyback: Rapid Fire Progress

The numbers speak for themselves.

As of April 30, 2025, CATL (Ningde Shidai 宁德时代) had already snapped up 6.641 million shares.

This accounts for 0.15% of the company’s total share capital.

The share prices during this buyback frenzy ranged from ¥231.5 RMB ($32.06 USD) to ¥237.38 RMB ($32.88 USD) per share.

Total cash deployed so far? A cool ¥1.551 billion RMB (approximately $214.81 million USD).

What’s truly impressive is the speed: CATL (Ningde Shidai 宁德时代) managed to complete nearly 39% of the lower limit of its entire repurchase plan in just 17 trading days.

That breaks down to an average daily repurchase of over ¥90 million RMB (around $12.47 million USD). Talk about aggressive!

Fueling the Confidence: Stellar Financial Performance

So, what’s giving CATL (Ningde Shidai 宁德时代) this swagger?

Their consistently strong operating performance.

Let’s look at the 2024 annual report highlights:

• Total Operating Revenue: ¥362.013 billion RMB (approx. $50.14 billion USD).
• Net Profit (Attributable to Parent Company Shareholders): ¥50.745 billion RMB (approx. $7.03 billion USD).
• Year-on-Year Growth: A solid 15.01%.

And the momentum didn’t stop there. The first quarter of 2025 continued this upward trajectory:

• Operating Revenue (Q1 2025): ¥84.705 billion RMB (approx. $11.73 billion USD).
• Net Profit (Q1 2025, Attributable to Parent Company): ¥13.963 billion RMB (approx. $1.93 billion USD) – a stunning 32.85% year-on-year jump!
• Comprehensive Gross Profit Margin: Healthy at 24.4%, showing continuous quarter-on-quarter growth.

More Than Just Growth: CATL’s Commitment to Shareholders

CATL (Ningde Shidai 宁德时代) isn’t just about impressive growth numbers; they’re serious about shareholder returns and protecting investor interests.

For two consecutive years, 2023 and 2024, they’ve maintained a dividend payout ratio of 50%.

Since going public, CATL has dished out nearly ¥60 billion RMB (around $8.31 billion USD) in cash dividends. That’s a significant return to investors!

Industry insiders are taking note, viewing CATL (Ningde Shidai 宁德时代) as a rare gem in the current capital market.

Why? It boasts a compelling dual characteristic: “growth + return.”

This means it’s not only a leader in its industry with proven high-growth capabilities but also offers long-term return potential through stable dividend policies and proactive share buyback arrangements.

Yinlun Machinery Jumps In: Another Buyback Announcement

The buyback buzz isn’t limited to CATL.

On the same day (May 6th), Zhejiang Yinlun Machinery Co., Ltd. (Yinlun Gufen 银轮股份, 002126) threw its hat into the ring.

Their plan involves repurchasing company shares for ¥50 million to ¥100 million RMB (approximately $6.93 million to $13.85 million USD).

Similar to CATL, the repurchased shares are intended for the company’s equity incentive plans or employee stock ownership plans.

The repurchase price is capped at ¥36 RMB ($4.99 USD) per share.

Interestingly, Yinlun Machinery (Yinlun Gufen 银轮股份) has secured backing for this move.

They’ve obtained a commitment letter from the Zhejiang Provincial Branch of the Industrial and Commercial Bank of China (Gongshang Yinhang 工商银行) for a special loan project specifically for share repurchase.

The bank has agreed to provide a special loan of up to ¥90 million RMB (approximately $12.47 million USD), with a loan term not exceeding 3 years. This dedicated financing underscores the strategic importance of the buyback for Yinlun.

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Hong Kong-Listed Companies Join the Repurchase Rally

The share buyback trend is also gaining serious traction among Hong Kong-listed companies.

On May 6, a roster of firms disclosed progress on their own share repurchase initiatives. These include:

• Swire Properties Limited (Taigu Dichan 太古地产, 01972.HK)
• Sinopec Shanghai Petrochemical Company Limited (Shanghai Shiyou Huagong Gufen 上海石油化工股份, 00338.HK)
• COSCO SHIPPING Holdings Co., Ltd. (Zhongyuan Haikong 中远海控, 01919.HK)
• Gushengtang Holdings Limited (Gushengtang 固生堂, 02273.HK)
• COSCO SHIPPING Development Co., Ltd. (Zhongyuan Haifa 中远海发, 02866.HK)
• Sihuan Pharmaceutical Holdings Group Ltd. (Sihuan Yiyao 四环医药, 00460.HK)
• Swire Pacific Limited (Type A shares) (Taigu Gufen Gongsi A 太古股份公司A, 00019.HK)
• Zhongyu Energy Holdings Limited (Zhongyu Nengyuan 中裕能源, 03633.HK)

Spotlight on Swire Pacific Limited

Swire Pacific Limited (Type A shares) (Taigu Gufen Gongsi A 太古股份公司A) offers a notable example.

On May 6th alone, they repurchased 335,000 shares.

The price per share ranged from HK$68.350 to HK$69.500.

This single day’s activity amounted to a total repurchase sum of HK$23.1486 million (approximately $2.97 million USD).

Following this, their stock closed at HK$68.700, up 0.44% for the day, with a total daily turnover of HK$86.9213 million.

This isn’t a one-off. Swire Pacific Limited (Type A shares) (Taigu Gufen Gongsi A 太古股份公司A) has been consistently buying back shares.

Since March 13, they’ve been conducting buybacks for 34 consecutive days!

This sustained effort has led to a cumulative repurchase of 11.9825 million shares.

The total accumulated repurchase amount? A whopping HK$801 million (approximately $102.69 million USD).

This consistent activity often signals a strong belief by management that the company’s shares are undervalued and represents a commitment to enhancing shareholder value.

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Why Are These Companies Buying Back Shares Anyway?

This flurry of share buybacks isn’t just random. It’s a strategic financial maneuver with several potential benefits and signals:

• Signaling Undervaluation: Companies often buy back shares when they believe their stock is undervalued by the market. It’s a way of saying, “Hey, we think our shares are a good investment.”
• Boosting Investor Confidence: Large-scale buybacks can instill confidence in investors, indicating that the company is optimistic about its future earnings and financial health.
• Returning Value to Shareholders: By reducing the number of outstanding shares, buybacks can increase earnings per share (EPS) and potentially drive up the stock price, directly benefiting existing shareholders.
• Efficient Use of Cash: For companies with significant cash reserves and limited high-return investment opportunities, buybacks can be an effective way to deploy capital.
• Supporting Employee Stock Plans: As seen with CATL and Yinlun, repurchased shares can be used for employee stock ownership plans (ESOPs) or equity incentives, helping to attract and retain talent without diluting existing shareholders by issuing new stock.

This trend, particularly with heavyweights like CATL (Ningde Shidai 宁德时代) leading the charge, suggests a bullish internal outlook within these corporations despite broader market uncertainties.

In conclusion, the ongoing wave of substantial share buybacks from CATL and other major players offers a compelling insight into corporate confidence and strategic financial management in the current economic landscape, painting a promising picture for attentive investors and market watchers.

FAQs

What exactly is a share buyback?

A share buyback, or stock repurchase, is when a company buys its own outstanding shares from the open market or directly from shareholders. This reduces the number of shares available, potentially increasing the value of the remaining shares.

Why are prominent companies like CATL (Ningde Shidai 宁德时代) buying back their own shares?

Companies like CATL (Ningde Shidai 宁德时代) initiate share buybacks for several reasons: confidence in their future performance, a belief that their stock is undervalued, to return cash to shareholders, to offset dilution from employee stock options, or to provide shares for equity incentive plans. CATL specifically cited its sustained and stable operating performance as a key driver.

How do share buybacks benefit investors?

Share buybacks can benefit investors by:

• Potentially increasing the stock price due to reduced supply and increased demand.
• Increasing earnings per share (EPS), as profits are divided among fewer shares.
• Signaling management’s confidence in the company’s future, which can be a positive indicator for investors.

Based on this information, is CATL (Ningde Shidai 宁德时代) a potentially strong investment?

While this article doesn’t offer financial advice, industry insiders, as mentioned, view CATL (Ningde Shidai 宁德时代) as having dual characteristics of “growth + return.” Its strong financial performance, leading industry position, consistent dividend payouts, and proactive share buybacks are factors investors typically consider positive. However, any investment decision should be based on thorough personal research and consultation with a financial advisor.

What does this wave of buybacks indicate about the Chinese market and company outlooks?

This wave of share buybacks, especially from major listed companies in both mainland China and Hong Kong, generally indicates a few things:

• Internal Confidence: Companies believe in their own operational strength and future growth prospects.
• Perceived Undervaluation: Management may feel their stock prices don’t reflect their true worth, making buybacks an attractive use of capital.
• Focus on Shareholder Value: There’s an increasing emphasis on returning value to shareholders and bolstering investor sentiment.
• This can be seen as a bullish signal for the involved companies and potentially for certain sectors of the market.

Relevant Sources

Original Source:
Securities Times (Zhengjuan Shibao 证券时报) – Company News Section (Note: The specific original article dated May 7, 2025, is not available as this is a future date. This link directs to the general company news section of the publisher.)

Other Relevant Articles:
China Buyback Wave Builds as Regulator Eases Path for Repurchase – Bloomberg Law
Hong Kong stock buy-backs hit record as firms rush to lift depressed valuations – South China Morning Post
China’s state firms lead $10 billion share buyback wave – Reuters