2.HK$2 billion - this is Bairong Yunchuang (Bairong Yun-W, 6608.).HK) has repurchased the amount of repurchases on the Hong Kong Stock Exchange since 2023, which is also close to the company's net profit in the first half of the year.
According to the interim report previously released by Bairong Yunchuang, the company recorded a net profit of 20.7 billion yuan, a year-on-year increase of 121%;Adjusted net income was 22.7 billion yuan.
Because the repurchase of Hong Kong stocks needs to be compulsorily cancelled, the purpose of the repurchase is not to fool ** or transfer benefits, but to focus on conveying the current situation that the company's market value is undervalued. At the same time, when a Hong Kong stock company takes out half a year's profits to buy its own **, what other information does it send?
Buybacks are an important part of the business model
Combing the repurchase situation of Bairong Yunchuang, it can be found that the repurchase action runs throughout the year, and more than three repurchase announcements will be disclosed almost every month, and the share repurchase has become a normal behavior of the company, rather than a surprise move to save the stock price.
This kind of market capitalization management strategy seems familiar, and the most typical user is Apple. There is a popular saying among Silicon Valley analysts: How did Apple's stock price reach a tenfold price in the past ten years?The answer is: repurchases.
Indeed, between 2012 and 2022, Apple has averaged about $20 billion in buybacks per quarter, and its market capitalization has increased from less than $50 billion to nearly $3 trillion in ten years, and its price-to-earnings ratio has increased from 10x to 30x.
Apple's buyback has even "encouraged" a number of competitors, and in recent years, many Silicon Valley technology companies have joined the camp of maintaining the company's market value through buybacks, the most typical is Google, whose quarterly buybacks have increased to about $15 billion.
In the opinion of experts, buybacks and profitability together constitute a logical system for the growth of the stock price of listed companies. Michael Roberts, a professor at the Wharton School of the University of Pennsylvania, believes that technology companies are naturally suitable to maintain market value through buybacks, because technology companies have sufficient cash reserves, and when the market environment is volatile and there is a lack of cutting-edge investment opportunities, buybacks can be regarded as a business of listed companies.
The same is true for Bairong Yunchuang. Buybacks have gradually become an important part of the business model and a good prescription for listed companies to allocate their own assets.
In fact, in the face of the downturn in the Hong Kong market for four consecutive years, more and more companies have become their own buyers. According to wind data, as of December 25, the total amount of buybacks in Hong Kong during the year has exceeded HK$120 billion, continuing to set a new historical record.
Therefore, in addition to fundamental factors, buybacks began to be listed as the criterion for speculation in the Hong Kong market. Some analysts said, "To screen the investment targets of the Hong Kong ** market, you only need to look through the repurchase list, in descending order, and the top 50 close your eyes."
According to this standard, Bairong Yunchuang's total repurchase volume in 2023 has ranked 32nd among Hong Kong stocks and among the top technology stocks, ahead of Tencent Holdings, Kuaishou, Xiaomi and other technology giants.
In the secondary market, buybacks have strengthened investors' confidence in holding firmly. **Information shows that in 2023, Bairong Yunchuang will close up 2707%, outperforming by more than 10 percentage points, of which, the fourth quarter outperformed the Hang Seng Index by more than 35 percentage points.
Repurchase of the sea god needle: the growth curve is clear
Looking further, since its listing, Bairong Yunchuang has spent a total of 4HK$9.3 billion share repurchase;Looking at the number of repurchases, according to wind data, the company has repurchased more than 43 million Class B shares, of which the number of share repurchases during the year exceeded 20 million shares.
For a company that has been listed for less than three years, both the number of shares repurchased and the repurchase amount of close to HK$500 million show that the repurchase is extremely determined. The fundamental logic behind this is that the company's growth path is very clear. Because such a positive strategy can only be adopted if you are optimistic about the company's medium- and long-term prospects.
According to the data, Bairong Yunchuang has achieved profit growth for six consecutive years, and in the past two years, it has taken the flywheel of value, following the doubling of net profit in 2022**, the company's net profit will continue to double in the first half of 2023.
After careful study, Bairong Yunchuang's high growth comes from its rich reserves of technical routes, and its sense of smell for the development trend of the AI industry is relatively sensitive, and it is stuck in every outlet of this track in advance.
For example, as early as 2018, it launched a forward-looking layout for generative AI, rather than catching up with the rumors of large models in 2023. Bairong Yunchuang also said in the financial report that the company's second growth curve based on AIGC has rapidly achieved large-scale expansion, helping it accelerate the generation of organic profits.
For another example, in terms of business model, the company took the lead in proposing to connect large models with businesses, and instead of adopting the strategy of peddling large models or application models, it builds a closed loop of value with MaaS (Model as a Service) and BaaS (Business as a Service), so that AI services and solutions can directly affect the business of commercial institutions.
At a time when the "100-mode war" is in full swing, Bairong Yunchuang continues to call for the connection between AI and application scenarios, and has carried out the layout in the field of multi-modality and AI agent as early as possible. Its intelligent generation assistant br-coder marks that the company has entered a new stage in the Copilot mode of deploying human and AI collaboration, allowing AI-assisted engineering development to participate in the business process of commercial institutions, which can improve the business operation efficiency of commercial institutions by more than 20%.
Recently, taking the lead in capturing the application trend of AI enterprise-level middle platform, Bairong Yunchuang has launched the Cybertron platform to help commercial organizations quickly generate internal bots, provide various model training, deployment and unified API service interfaces including large models, and realize the unified management of AI computing power, AI resources and AI services in the whole process of AIOPS.
Bairong Yunchuang explained that for commercial institutions, whether it is business operations or internal operations, there will be several blind spots, for example, there are problems such as mismatch between the user portrait and the back-end support of front-end intelligent marketing, and the establishment of an AI enterprise-level middle platform can assist commercial institutions to effectively integrate the front, middle and back-end, realize the integrated layout of the internal knowledge base and tool library of the enterprise, and provide unified AI Copilot and AI agent services to the outside world.
Looking forward to the follow-up, many Chinese and foreign brokerages, including CICC and Daiwa, have made a positive outlook on Bairong Yunchuang, reiterating their "**" or "overweight" ratings, of which Haitong International has given Bairong Yunchuang a target price of 20HK$44 shares.