Securities Firms Accelerate Buybacks in H2, with Cancellation-Type Becoming Mainstream

September 19 (Caixin) — A wave of cancellation-oriented share buybacks is unfolding among Chinese brokerages, with three firms disclosing updates on their repurchase plans this week alone.

According to industry analysis, stock buybacks tend to have a more direct positive impact on share prices compared to cash dividends. When repurchased shares are ultimately cancelled, the company's total share capital and net assets decrease accordingly. Under stable earnings conditions, this can boost earnings per share (EPS) and return on equity (ROE).

New Round of Buyback Plans Intensifies in H2, Peaking in August

From a timeline perspective, brokerages have significantly ramped up buyback activity since July.

While many firms announced progress on earlier buyback plans in the first half of the year, most brokerages and their listed entities launched a new round of buyback plans in the second half of 2026. These include:

• Guojin Securities
• Hua'an Securities
• Huachuang Yunxin
• Changjiang Securities
• Guolian Minsheng
• Zhongtai Securities
• Hongta Securities

In terms of expected repurchase amounts, Guojin Securities has the highest upper limit, planning to repurchase between RMB 150 million and RMB 300 million. Hongta Securities has the lowest upper limit, planning between RMB 50 million and RMB 100 million. The remaining five firms all plan repurchases in the RMB 100 million to RMB 200 million range.

Notably, the initiators of these buyback plans are not limited to the listed companies themselves. Guojin Securities' new round was proposed by its controlling shareholder, Changsha Yongjin, while Zhongtai Securities' plan was proposed by its board chairman.

August saw a concentrated surge in buyback announcements. The brokerage sector has experienced a flurry of share purchases and buybacks, marking a relatively concentrated window for industrial capital entry in recent years. Changjiang Securities, Guolian Minsheng, Zhongtai Securities, and Hongta Securities all disclosed new buyback plans in August.

In addition to brokerages accelerating their own buybacks, some shareholders have also disclosed plans to increase their holdings, reflecting confidence in their brokerages' development. Examples include Dongwu Securities and Industrial Securities.

Industry analysts note that against a backdrop of historically low valuations, the divergence between strong earnings growth and depressed valuations has prompted both industrial capital and the listed companies themselves to act simultaneously, sending a clear signal of confidence in the sector's value.

Some Brokerages Complete Earlier Buyback Plans This Year

Some brokerages that disclosed buyback plans this year are actually updating progress on plans initiated one to two years earlier.

Guojin Securities has changed the purpose of its repurchased shares multiple times this year:

• On April 24, the company announced it would change the purpose of shares repurchased in 2023–2024 from "for employee stock ownership plans and/or equity incentives."
• On June 12, following a proposal by controlling shareholder Changsha Yongjin, the company launched its first buyback plan for 2026, with an expected repurchase amount between RMB 150 million and RMB 300 million.
• On September 15, the company changed the purpose of this round of repurchased shares from "for maintaining the company's market value and shareholder equity" to "for cancellation and reduction of registered capital."

To date, Guojin Securities has repurchased a total of 17.3996 million shares, amounting to RMB 150 million.

Whether for earlier plans or the new round, the company's subsequent shift toward cancelling shares to reduce registered capital reflects confidence in its medium- to long-term development, maintaining a consistent buyback logic.

Hongta Securities has conducted two rounds of buybacks since 2025:

• The first round began in August 2025 and was fully completed by June 2026, with a repurchase price cap of RMB 12.55 per share. A total of 23.554 million shares were repurchased and cancelled, amounting to approximately RMB 199.8 million.
• The second round was launched on August 31 this year, with a lower repurchase price cap and a reduced maximum repurchase amount from RMB 200 million to RMB 100 million.

Huachuang Yunxin announced on July 25 a plan to cancel repurchased shares and reduce registered capital. On April 2, 2022, the company approved a share repurchase proposal, which was completed on September 28, 2023. A total of 41.2411 million shares were repurchased, of which 30.3537 million shares are to be cancelled. On the same day, the company announced a new buyback plan for 2026, citing that its stock's closing price was below its latest net asset value per share and expressing optimism about the future.

Three Key Characteristics of Brokerage Buybacks in 2026

Brokerages typically use repurchased shares for reducing registered capital, employee stock ownership plans or equity incentives, converting convertible bonds, or maintaining company value and shareholder equity. Unlike previous years, when buybacks were mostly used for equity incentive plans, this year's buyback activity has clearly shifted toward maintaining company value and stabilizing expectations.

Overall, brokerages disclosing buyback plans this year exhibit the following characteristics:

1. Cancellation-Oriented Buybacks Heat Up, with "Old Shares, New Cancellations" Prominent

Many brokerages have changed the purpose of previously completed buybacks in 2026 and proceeded with cancellations. For example, Guotai Haitong, Zheshang Securities, and Huachuang Yunxin plan to cancel 30.3537 million shares.

Additionally, among brokerages announcing new buyback plans this year, Guojin, Hua'an, Huachuang Yunxin, Changjiang, and Guolian Minsheng have all stated that if repurchased shares are not fully used for their intended purposes or sold within three years, the unused portion will be cancelled according to relevant procedures.

Once cancelled, repurchased shares are permanently removed from total share capital. Under unchanged net profit conditions, this directly boosts earnings per share and net asset value per share, offering stronger shareholder returns compared to holding treasury shares. The concentrated emergence of this trend signals that brokerages' market value management is advancing from "short-term price stabilization" to "long-term value enhancement."

2. Diversified Buyback Purposes, but Market Value Management Remains the Core

Based on announcements from brokerages disclosing buyback plans this year, market value management and maintaining company value and shareholder equity still dominate. A minority of plans are used for employee stock ownership plans or equity incentives.

• Changjiang Securities plans to repurchase between RMB 100 million and RMB 200 million this year for employee stock ownership plans or equity incentives, aiming to improve its long-term incentive mechanism.
• Zheshang Securities, which previously sought to establish a market-based mechanism for sharing benefits and risks between employees and the company, repurchased shares in 2022 for equity incentives and completed the repurchase of 38.7816 million shares in August 2023. These shares were ultimately cancelled in June this year.
• Guotai Haitong, due to three of 50 reserved grantees from its 2024–2025 equity incentive plan being suspected of illegal activities or failing performance assessments, plans to repurchase 81,700 reserved shares at RMB 5.76 per share.

3. Most Brokerages Have Already Made Progress on New Buyback Plans

Among brokerages that have disclosed new buyback plans this year, most have already begun executing repurchases:

| Brokerage | Amount Repurchased (RMB) | |---|---| | Guojin Securities | 150 million | | Hua'an Securities | 84.1679 million | | Huachuang Yunxin | 77.043135 million | | Guolian Minsheng Securities | 5.313 million | | Zhongtai Securities | 6.6041 million |

(Source: Caixin)