"Buy Sinopec , don't be afraid of life", Sinopec, which was once called deterministic arbitrage by stock critics, has a new development.
On the evening of November 30th, Sinopec announced that as of November 30, 2022, Sinopec’s plan to increase its holdings of the company’s H shares and shares through its overseas wholly-owned subsidiary has been implemented.
The company also completed the repurchase of A shares before. On November 25, Sinopec actually repurchased 442 million A shares of the company, using a total of RMB 1.888 billion.
This repurchase is the first share repurchase of Sinopec since its listing 22 years ago, which can be called a big deal. So why are companies spending so much on buybacks? How does this repurchase affect stock price ?
回购尽显“诚意”
回顾石化行业的周期来看，整个行业呈现的是下行趋势，只是偶尔能雄起一把。 And when this "occasionally" will come and how long it will last, it is uncertain.
Take our recent cycle as an example, around 2015, our cycle was considered to be the beginning, and this cycle has lasted for three or four years in 2019. The reasons behind it are very complicated, not only because of oil prices , There are reasons for the imbalance between supply and demand.
Many phenomena in the development of the industry and the trend of economic operation show that the cyclical top of the petrochemical industry is coming along with the rapid growth of performance. Naturally, the risks will gradually increase.
At present, the market generally believes that the trough of this round of cycle is likely to appear between 2023 and 2024, and the high point of the new round of industry cycle may not be until after 2025. It is precisely because of this uncertainty that Sinopec not favored by investors.
In general, the petrochemical industry is an important pillar industry of the national economy, with a high degree of industrial correlation and wide product coverage, which plays an important role in stabilizing economic growth, improving people's lives, and ensuring national defense security. Therefore, Sinopec, as the largest petrochemical enterprise in China, has a relatively good development prospect.
Although this repurchase has little fluctuation in Sinopec's stock price, it is a pinnacle of tranquility for shareholders, especially those who are bullish on Sinopec for a long time.
Source: Petroleum and Chemical Industry Park
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