Recent weakness in both A-share and Hong Kong capital markets has prompted a growing number of listed companies to significantly increase their share buyback efforts.
This latest buyback wave is concentrated in two major themes: industrials and information technology. Within these sectors, machinery, electronic components, and semiconductor equipment are drawing the most attention, with large-cap computing power chain players emerging as key participants.
As of October 27, several industry leaders including Eoptolink Technology Inc.,Ltd. (300502.SZ), Gigadevice Semiconductor Inc. (603986.SH), Cxmt Corporation (688825.SH), Avary Holding(Shenzhen) Co.,Limited (002938.SZ), and Hygon Information Technology Co.,Ltd. (688041.SH) had densely released buyback plans or progress announcements.
Angel investor and senior artificial intelligence expert Guo Tao noted that this round of A-share buybacks shows extremely strong structural differentiation, with hard tech companies, especially leaders in the computing power industry chain, becoming the main force. This stands in sharp contrast to previous market cycles where consumer and cyclical sectors dominated buyback activity.
He added that the purposes of buybacks are becoming more differentiated. Some are used for employee stock ownership and equity incentives, while others choose to directly cancel shares. These different choices of capital tools reflect varying corporate objectives and send different signals to the market.
Buybacks and Shareholding Increases Accelerate
Since the start of this year, more than a thousand listed companies have implemented share buybacks. According to disclosed information, several technology-related stocks have executed buybacks exceeding 1 billion yuan, with total buyback amounts reaching 13.8 billion yuan.
Consumer electronics industry analyst Liang Zhenpeng believes the market logic behind hard tech leaders simultaneously conducting buybacks and shareholding increases is primarily a recognition of their own long-term value. Through these actions, companies aim to convey confidence to the market, stabilize stock prices, optimize capital structures, and take advantage of current valuation windows for capital operations, thereby strengthening investor expectations for the growth potential of the AI computing power industry chain.
Wind data shows that since September this year, 380 A-share companies have newly disclosed buyback and shareholding increase plans, involving amounts reaching 140 billion yuan. As of October 28, 139 companies that disclosed buyback proposals have set a combined maximum repurchase amount of 76.2 billion yuan.
Bai Wengxi, vice chairman of the China Enterprise Capital Alliance, told reporters that the STAR Market has seen new buyback limits of 18 billion yuan this year, with one-third occurring in October alone. Buybacks are transforming from a market stabilization tool into a normalized shareholder return mechanism.
Reporters noted that in the first half of October alone, more than 200 A-share companies released buyback plans, setting a new monthly record. Specifically, Cxmt Corporation leads with a proposed buyback of 1 billion to 2 billion yuan, followed by Hygon Information Technology Co.,Ltd. at 500 million to 800 million yuan, Sugon at 300 million to 500 million yuan, Montage Technology at 300 million to 500 million yuan, and Biwin Storage at 200 million to 250 million yuan.
Liang Zhenpeng pointed out that the entities conducting these buybacks are mainly leading companies with cash flow support, rather than universally loss-making companies passively trying to stabilize their stock prices. Many of these targets have solid operational fundamentals.
In terms of target distribution, semiconductor, optical module, and PCB companies—key computing power supporting segments—are densely releasing plans, highly resonating with the pace of AI computing power capital expenditure.
Additionally, the proposers differ from the past, with most plans personally proposed by chairmen. The buyback proposals for Hygon Information Technology Co.,Ltd. and Sugon were both put forward by Hygon chairman Li Jun. Zhu Yiming of Cxmt Corporation, Lu Guangquan of Piotech, Sun Chengsi of Biwin Storage, and Wu Shijun of Recodeal also directly submitted proposals to their boards as chairmen or actual controllers.
Beyond buybacks, in terms of shareholding increases, controlling shareholders, shareholders holding more than 5%, and senior executives of many listed companies have been continuously increasing their holdings, releasing positive signals. Companies including Luwei Optoelectronics, Zhenyou Technology, and Loongson Technology have also issued shareholding increase announcements.
Wind data shows that from September to October, 51 companies disclosed plans by major shareholders and executives to increase their holdings, with proposed increases totaling 15.694 billion yuan.
Industry observers believe that the concentrated launch of buybacks and shareholding increases by hard tech leaders is a rational choice combining multiple factors: fundamental judgments, valuation levels, and industry cycles. From the perspective of the AI computing power industry chain, most companies have delivered decent third-quarter results, and buybacks and shareholding increases can effectively boost market confidence in the short term.
However, it is worth noting that not all of these buybacks have been implemented. Most still await board approval, and each plan will be rolled out in batches over implementation periods of six to twelve months.
For example, plans from Eoptolink Technology Inc.,Ltd., T&S Communications, and Avary Holding(Shenzhen) Co.,Limited are still at the proposal stage and have not yet resulted in actual purchases. However, some listed companies that launched buyback plans earlier have announced implementation progress.
According to Luxshare Precision's announcement, as of October 15, it had cumulatively repurchased 17.6654 million A-shares, with a highest transaction price of 65.00 yuan per share and a lowest of 50.14 yuan per share, totaling approximately 1 billion yuan. Lingyi iTech also announced the same day that as of October 15, it had cumulatively repurchased 41.5603 million shares for a total of 539 million yuan.
Different Approaches Among the Three Optical Module Giants
In this buyback wave, the three giants in the optical module sector—Eoptolink Technology Inc.,Ltd., Innolight, and T&S Communications—have all released buyback proposals, but their purposes, proportions, and implementation paces differ.
Bai Wengxi noted that optical modules are the segment within AI hardware where cash flow is realized first. Buybacks both correct undervaluation and allow shares to be used for incentives to lock in core research and development talent. Among them, T&S Communications' buyback explicitly includes cancellation.
It is understood that there are three forms for the use of buyback funds: first, cancellation and capital reduction, which involves directly canceling repurchased shares to reduce share capital and increase earnings per share; second, use for equity incentives or employee stock ownership, where shares are held for future distribution to employees; third, market value management, which serves as a price support action during periods of low stock prices.
On the afternoon of October 23, Eoptolink Technology Inc.,Ltd. announced plans to use its own and/or self-raised funds to repurchase some of its already-issued RMB ordinary shares (A-shares) through centralized bidding transactions, and to use them in due course for subsequent equity incentives or employee stock ownership plans.
That same evening, T&S Communications announced that its board had approved a buyback plan to use its own funds to repurchase shares through centralized bidding. The repurchase price shall not exceed 350 yuan per share. Based on the maximum repurchase price, the estimated number of shares to be repurchased is 285,700 to 428,600 shares, representing 0.0262% to 0.0393% of the company's total share capital. All repurchased shares will be canceled to reduce registered capital. The implementation period is within six months after shareholder meeting approval, and the proposal still requires shareholder meeting approval.
As for Innolight, reporters learned that as of press time, the company had completed at least 1 billion yuan in share buybacks since September. On October 23, Innolight announced plans to change all repurchased shares from being used for equity incentives/employee stock ownership to being canceled to reduce registered capital.
Industry observers note that unlike the conventional practice of using repurchased shares for employee incentives, choosing to directly cancel shares represents a stronger capital operation.
Liang Zhenpeng told reporters that share cancellation can directly reduce total share capital, increase earnings per share and net assets per share, and enhance shareholder returns without changing performance, genuinely benefiting existing shareholders. On the talent competition front, incentive-based buybacks better serve team retention and attracting technical talent, fitting the current situation of fierce talent competition in the hard tech industry.
Guo Tao believes that the cancellation model does not serve a talent incentive function and focuses more on rewarding existing shareholders. It also indicates that the company currently has no urgent need for equity incentives, or believes that the current valuation level is suitable for directly giving back to shareholders.
However, he also cautioned that such actions need continuous monitoring. If a company with existing funding gaps in capital expenditure and research and development investment conducts large-scale cancellations, it could raise market concerns about a decline in long-term research and development investment.
According to public market statistics, before the introduction of the new "Nine National Articles," the proportion of cancellation-type buybacks in A-shares had long been below 20%. In 2025, completed cancellation-type buybacks exceeded 42.8 billion yuan, accounting for more than 38% of total buybacks that year. In 2026, the proposed buyback amount explicitly for cancellation purposes has exceeded 100 billion yuan, accounting for more than 60%, reaching a new high since 2020.
Liang Zhenpeng reminded that some buybacks choosing direct cancellation help optimize equity structures and enhance market trust in companies, but attention must be paid to the balance between capital use efficiency after cancellation and long-term incentive mechanisms.
Bai Wengxi told reporters that the impact of this buyback wave on the capital market should be viewed across different time horizons. In the short term, it serves as sentiment support for the sector, alleviating irrational sell-offs. In the medium term, it can separate "AI story stocks" from "genuine cash flow stocks." If buybacks can be implemented, leading companies will be more recognized by allocation funds.
In Bai Wengxi's view, the current AI wave has created a problem of "valuation front-loading" across the entire industry. Although real demand for DDR5, DCU, and optical modules is materializing, the market had previously priced in perpetual high growth premiums. At the trading level, some targets have discounted 2028-2030 expectations into 2026, which needs to be digested quarter by quarter through orders, gross margins, and cash collection.
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