Bohai Leasing's 300 million to 500 million yuan buyback plan boosts the stock to the daily limit, after a previous buyback resulted in nearly 40% loss and exit.

Ask AI · How has this share buyback been optimized compared with the losses from the previous round?

Reporter: Wu Yongjiu Zhang Wan Editor: He Jianchuan

On March 24, Bohai Leasing’s stock price moved strongly. In the afternoon, it opened and surged quickly, hitting the daily limit at 13:02 and sealing the board. It closed at 4.29 yuan per share, and the company’s latest total market value was 265.32 billion yuan. The direct trigger for this stock price anomaly was a series of announcements published by the company on the evening of March 23, including its share repurchase, an appraisal/valuation enhancement, and a market value management制度.

A “share price support” buyback plan of 300 million to 500 million yuan, with the stock hitting the daily limit in response

On the evening of March 23, Bohai Leasing simultaneously released multiple announcements, with the core themes revolving around share repurchases, valuation enhancement, and market value management. Among them, the share repurchase plan was one of the core components of these announcements.

According to the repurchase announcement, Bohai Leasing plans to use 300 million to 500 million yuan in self-owned funds and funds raised (including stock repurchase special loan funds, etc.) to repurchase the company’s shares. The repurchase price will not exceed 7.36 yuan per share. The intended number of shares to be repurchased ranges from 40.7609 million shares to 67.9348 million shares, accounting for 0.66% to 1.10% of the company’s total issued share capital as of now. Based on the closing price of 3.9 yuan on the announcement date, the implied premium rate at the upper limit of the repurchase price is about 88.72%.

What is noteworthy is that all shares repurchased this time will be used for sale, which falls under a “repurchase situation that is necessary for maintaining the company’s value and the legitimate rights and interests of shareholders.” The company said that, affected by factors such as recent volatility in the capital market, the company’s stock price has experienced significant fluctuations. As of March 20, the company’s stock closing price had recorded a cumulative decline of 21.36% over 20 consecutive trading days, and it was lower than the net asset value per share of 4.67 yuan in the latest period, triggering relevant provisions such as the “No. 9—Guidelines on Self-Regulatory Supervision for Share Repurchases by Listed Companies” issued by the Shenzhen Stock Exchange. Bohai Leasing’s repurchase this time can be said to be a low-level “share price support.” The company also stated that if there are later needs for an employee share ownership plan or equity incentives, it may consider adjusting the intended use of the repurchased shares.

Alongside the repurchase plan, Bohai Leasing’s valuation enhancement plan and market value management制度 were also put into effect. Among them, the issuance of the valuation enhancement plan stems from the fact that from January 1, 2025 to December 31, 2025, the company’s stock closing price remained below net asset value per share for 12 consecutive months, meaning it was a long-term discount to net assets. The company mainly optimizes valuation from areas including focusing on its core business, mergers and acquisitions and restructuring, cash dividends, share repurchases, and incentive mechanisms. The rollout of the above repurchase plan is also an implementation measure of this valuation enhancement plan.

A reporter from The Daily Economic News (hereinafter referred to as “the reporter from The Daily Economic News”) found that, during the period from February 5 to March 12 this year, Bohai Leasing’s stock price had exceeded the latest net asset value per share of 4.67 yuan, moving out of the net-asset-discount range. However, after the stock price hit a new high in nearly five years of 5.6 yuan on February 25, it continued to slide. Starting from March 13, the stock price fell back below net assets again. As of the close on March 24, the latest price-to-book ratio was about 0.92 times.

The market value management制度 makes arrangements from the macro level regarding the basic principles, organizational responsibilities, and implementation paths for the company’s market value management.

Driven by the multiple positive catalysts above, Bohai Leasing’s stock price on March 24 stopped the decline and rebounded, ending the continuous downward trend since late February. In the afternoon, the stock opened and quickly sealed the daily limit.

The previous round exited with nearly 40% losses; 2025 goodwill impairment led to performance losses

The reporter from The Daily Economic News has found that Bohai Leasing’s previous round of share repurchases began in 2018. The company originally planned to repurchase 61.8452 million shares, with an upper limit repurchase price of 7 yuan per share, and a planned repurchase amount of no more than 500 million yuan. However, affected by changes in the macroeconomic environment and external market conditions, the company prioritized using cash flow for daily operations and debt repayment. Ultimately, in October 2019, the company terminated the repurchase. The company actually repurchased 17.1661 million shares, using a total amount of 59.9075 million yuan; the average repurchase price was 3.49 yuan per share. The repurchased shares would be entirely used for transferring or selling to external parties. Based on the repurchase quantity, the actual completion rate was less than 30%.

According to relevant regulations, when a listed company repurchases shares for sale, it must dispose of them within three years after the completion of the repurchase matter. The company disclosed a reduction (sell-down) plan in August 2022, and carried out the sell-down from September 22 to October 18, 2022. During the reduction period, the company’s stock price fluctuated in the range of 2.02 yuan to 2.24 yuan, which was significantly lower than the repurchase cost. Ultimately, all of the above repurchased shares were fully reduced. The total proceeds from the reduction were 37.4725 million yuan, and the average reduction price was about 2.18 yuan per share. Based on this calculation, compared with the repurchase cost, the reduction price in this round resulted in a loss of about 37.54%.

The company’s announcement stated that the proceeds from the sell-down would be used to replenish working capital. The difference between the reduction price and the repurchase price would be recorded in or netted against capital reserve accounts, would not affect profit for the current period, and would not have a major impact on the company’s operations, financial condition, or future development.

Bohai Leasing’s main businesses cover leasing and production services for aircraft, containers and domestic infrastructure, high-end equipment, commercial properties, and new energy. As one of the world’s top three aircraft leasing companies (calculated by fleet size), its performance is highly correlated with the level of business in the aviation industry. In 2020, with a downturn in global aviation industry conditions, the company’s attributable net profits for 2020 to 2022 were negative for three consecutive years, with cumulative losses exceeding 10 billion yuan. After 2022, as the global aviation industry continued to recover, the company’s operations gradually improved, and attributable net profits turned positive in 2023 to 2024.

According to the company’s published performance forecast, for 2025 its attributable net profit is expected to be a loss of 250 million to 500 million yuan, representing a year-on-year decline of about 1.15 billion to 1.4 billion yuan, and performance will be loss-making again. The company said that this loss mainly resulted from selling 100% of the equity interest in Global Sea Containers Ltd, and recording an impairment loss of goodwill of about 3.289 billion yuan. If the impact of the above goodwill impairment is excluded, the company expects its 2025 attributable net profit to be about 2.8 billion to 3.05 billion yuan, representing a year-on-year increase of 210% to 237%. As for the reasons for the performance growth: on the one hand, in 2025, global air passenger demand remained favorable. Coupled with factors such as aircraft manufacturers’ constrained production capacity, the market value of aircraft, leasing rates, and renewal rates remained at high levels. During the reporting period, the company completed the acquisition and closing of Castlelake Aviation Limited’s 100% equity interest, and continuously optimized its fleet structure through aircraft asset sales, improving its yield level. The profit of its aircraft leasing business increased compared with the same period of the previous year, among other factors. On the other hand, during the reporting period, the company and its subsidiaries generated debt restructuring gains of about 660 million yuan through debt restructuring, extensions, and related actions; this item is a non-recurring gain.

A research report by Guojin Securities believes that Bohai Leasing’s profit decline in 2025 is mainly due to goodwill impairment arising from the sale of subsidiaries. Tight supply and demand in the aircraft industry is expected to push up aircraft values and lease prices. After selling the subsidiary’s GSCL equity, the company focuses on aircraft leasing businesses with higher growth potential amid favorable conditions, and its leasing yield is also expected to rise. In addition, the funding obtained from selling subsidiaries is expected to ease debt pressure and help reduce the average cost ratio and financial expenses.

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Daily Economic News