Shares of Swire Pacific, the Hong Kong-based conglomerate, surged by 14.5% to 58.55 Hong Kong dollars in early Wednesday trading, following the company’s announcement of a substantial share buyback program. This marks the largest daily rise for the company since early 2021.
In a recent exchange filing, Swire Pacific disclosed its plan to repurchase shares worth up to 6 billion Hong Kong dollars (US$767.3 million) from December 6 until the end of its annual general meeting in May 2025. The move is seen as a positive surprise and is expected to be well-received by investors, according to analysts George Choi and Ryan Cheung from Citi.
Swire Pacific expressed confidence in its financial position, stating that it has sufficient resources to implement the program while maintaining a solid financial foundation. The buyback will be funded through existing capital and cash reserves.
This development follows Swire Pacific’s impressive first-half net profit, which more than doubled to HK$4.22 billion. This growth was attributed to the improved performance of the Cathay Pacific Airways group.
It is worth noting that this is not Swire Pacific’s first foray into share buybacks. In fact, the company recently completed a HK$4 billion program announced in August 2022.
With this new share buyback initiative, analysts anticipate that Swire Pacific’s net asset discount will narrow from its current level, providing further optimism for investors.
