The A-share repurchase market is now showing differentiation: reduction and cancellation proceeding in parallel

Pan Yue Charting

Share repurchases as a means of market value management have shown a clear polarization in the A-share market this year: on one side, nearly 15 companies have sold previously repurchased shares, using “low buy, high sell” strategies to raise short-term funds, with some companies achieving impressive gains; on the other side, the number of cancellation-style repurchase cases is expanding, with listed companies actively reducing their share capital and strengthening intrinsic value.

Both repurchase and reduction have achieved positive returns this year

According to incomplete statistics, more than 10 listed companies, including Huafu Fashion, Aurorid, and Hebang Bio, have successively announced progress in reducing holdings of previously repurchased shares or disclosed reductions of repurchased shares. From the reduction results, all these companies have realized positive gains, with companies like Aurorid, Yongyue Technology, and Tongji Technology generally selling their shares at prices higher than their repurchase prices.

On March 17, 2026, Aurorid (600666.SH) disclosed an update on its reduction progress, showing that by March 16, 2026, it had reduced a total of 28.48 million shares of previously repurchased stock, at an average price of 3.92 yuan per share, with a total transaction amount exceeding 1.11 billion yuan. The company’s September 2024 announcement of the repurchase implementation results showed that to maintain company value and shareholder interests, it had repurchased 35.72 million shares, accounting for 1.29% of total share capital, with a total investment of 50.0255 million yuan, at an average price of only 1.40 yuan per share.

Compared to the average repurchase price, the average transaction price for Aurorid’s reduction this time has risen sharply. Even before fully reducing all repurchased shares, the company has already gained over 50 million yuan, ranking among the top in this round of listed companies reducing holdings of repurchased shares. Performance-wise, Aurorid expects to turn a profit in 2025, with net profit attributable to the parent company estimated between 120 million and 160 million yuan, ending years of losses. However, net profit after non-recurring gains and losses is still expected to be between -185 million and -145 million yuan, with its main business still operating at a loss.

Yongyue Technology (603879.SH) repurchased approximately 4.85 million shares, accounting for 1.35% of total share capital, at an average price of about 3.11 yuan per share from March to May 2024. On October 31, 2025, the company disclosed a reduction plan. By February 28, 2026, Yongyue Technology had reduced 2.85 million shares through centralized bidding, about 0.79% of total share capital, at an average price of about 6.66 yuan per share, with a total transaction amount of approximately 18.973 million yuan. Regarding performance, the 2025 earnings forecast indicates that net profit attributable to the parent company is expected to be a loss of 33.5 million to 50 million yuan, mainly due to sluggish drone sales and changes in raw material prices in the chemical sector.

Tongji Technology (600846.SH) repurchased about 4.4155 million shares, about 0.71% of total share capital, at an average price of 7.01 yuan per share from August to October 2024. The company disclosed a reduction plan on October 22, 2025. By February 6, 2026, Tongji Technology had reduced all 4.4155 million repurchased shares through centralized bidding, about 0.71% of total share capital, at an average price of 13.60 yuan per share, with a total transaction amount of about 60.05 million yuan.

Fangda Carbon New Material (600516.SH) repurchased about 196 million shares from September 19 to November 4, 2024, accounting for 4.88% of total share capital, at prices ranging from 3.96 to 5.48 yuan per share, spending about 100 million yuan to maintain company value and shareholder interests. In November 2025, the company announced plans to reduce no more than about 75.69 million shares of the repurchased stock, with proceeds used to supplement working capital. As of February 25, 2026, the dedicated securities account for repurchase had reduced about 40.26 million shares (1% of total share capital) at an average price of 5.983 yuan per share, with a total transaction amount of about 241 million yuan. The reduction ranks among the top in this year’s repurchase and reduction companies, with the company’s dedicated securities account still holding 209 million shares (5.19%).

Acceleration of cancellation-style repurchases

Although repurchase and reduction can stabilize stock prices and protect company value, the actual practice of “buy low, sell high” often raises market doubts about “manipulative repurchases turning into arbitrage tools.” In April 2024, the State Council issued the “Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality Development of the Capital Market” (the new “Guo Jiu Tiao”), elevating the importance of the capital market. The new “Guo Jiu Tiao” explicitly requires A-share companies to focus on market value management, especially emphasizing “guiding listed companies to cancel shares lawfully after repurchase.”

Market analysts told reporters: “Cancellation-style repurchase refers to companies directly canceling shares after repurchase, reducing total share capital, and directly increasing EPS, net assets, and ROE, benefiting all shareholders, fundamentally eliminating arbitrage and idle stock issues, and returning to the original purpose of optimizing structure and rewarding shareholders.”

Wind data shows that in 2025, 1,495 A-share companies initiated share repurchases, with a total repurchase amount of 142.736 billion yuan. Industry-wise, sectors such as power equipment, electronics, home appliances, and machinery each repurchased over 100 billion yuan. According to incomplete statistics, over 40% of repurchase plans aim for full or partial cancellation, up from 38.33% in 2024. For example, Midea Group’s 10 billion yuan repurchase plan will see 7 billion yuan used for cancellation; Kweichow Moutai’s 6 billion yuan repurchase will be fully canceled.

This trend continued into 2026. Wind data shows that as of March 24, 2026, 356 listed companies had repurchased shares, totaling 18.189 billion yuan.

Regarding the accelerating trend of cancellation-style repurchases, a non-bank financial team from a North China securities firm pointed out that cancellation-style repurchase aligns with the new “Guo Jiu Tiao” encouraging long-term value investment. Compared to traditional market value management and equity incentive repurchases, direct cancellation has a “tax-free dividend” effect, as investors do not bear dividend tax, and it can directly boost core financial indicators like EPS and ROE. This improves valuation recovery efficiency, especially benefiting industry leaders and state-owned enterprises with stable cash flows and strong performance certainty.

Another brokerage research report emphasized that the overall valuation of A-shares remains reasonable, and the increase in cancellation-style repurchases signifies an upgrade in corporate governance. It can optimize capital structure, avoid long-term idle stock and subsequent selling pressure, and signal management’s confidence in the company’s fundamentals, creating a positive cycle of “repurchase and cancellation—value enhancement—confidence boost.” With continued policy guidance, normalized cancellation will become a standard move for high-quality companies’ capital operations.

A strategy team from an East China securities firm analyzed from a market impact perspective that compliant reductions and repurchases are often driven by short-term cash flow needs, with limited market recognition. In contrast, cancellation-style repurchases are irreversible value-adding actions that are more likely to attract institutional and long-term funds, further driving valuation differentiation in the A-share market and pushing companies to abandon short-term arbitrage thinking, returning to the core of long-term value creation.