Hong Kong stocks' buyback enthusiasm is soaring, Tencent repurchased HKD 52.3 billion in the first half of the year, "outperforming" major shareholders'减持。
1、Tech giants ramp up share buybacks, spending big
Let’s first look at Alibaba and JD.com, both dual-listed in the U.S. and Hong Kong. The former repurchased $4.8 billion in Q1 and $5.8 billion in Q2, totaling $10.6 billion (~HK$82.8 billion). The latter repurchased $1.2 billion in Q1, but only added $100-200 million in the 1.5 months leading up to its earnings release (May 16), putting its H1 buyback estimate below $1.5 billion (~HK$11.7 billion).
Next, let’s examine Hong Kong-listed giants. Tencent $TENCENT(700.HK) remains the undisputed "buyback king" of the Hong Kong market.
According to our analysis, excluding sensitive periods like earnings blackouts, Tencent didn’t miss a single buyback day in Q2, executing 38 repurchases totaling over 100 million shares—37 of which exceeded HK$1 billion daily. Its quarterly buyback hit HK$37.5 billion, up 150% from Q1’s HK$14.8 billion.
Tencent’s H1 buybacks reached HK$52.3 billion, surpassing last year’s full-year total of HK$49.4 billion and accounting for 43.2% of all HKEX-listed company repurchases. Meituan took third place with HK$13.9 billion (11.5% of HKEX total), while Kuaishou’s ~HK$1.9 billion was relatively modest.
Ranked by buyback size: Alibaba > Tencent > Meituan > JD.com > Kuaishou.
Yet paradoxically, their stock performances diverged sharply. Our check shows Tencent and Meituan surged 27.93% and 35.65% respectively in H1, far outpacing the market, while Alibaba, JD.com, and Kuaishou lagged with drops of 4.73%, 5.59%, and 12.84%. In other words, Alibaba—the biggest spender—saw weaker price support than Tencent or Meituan.
2、Buybacks aren’t a cure-all—stock gains require multiple catalysts
Post-buyback stock performance isn’t guaranteed; additional drivers are needed.
Take Tencent: its rally reflects multiple tailwinds. First, major shareholder Prosus’s share sales became negligible as Tencent’s buybacks dwarfed them.
In Q1, Tencent’s HK$14.8 billion repurchases were 1.2x Prosus’s $1.6 billion (~HK$12.5 billion) buyback (funded by Tencent share sales).
In Q2, the gap widened further. Euronext disclosures show Prosus repurchased $1.76 billion (~HK$13.75 billion) of its own shares—making Tencent’s buybacks 2.7x larger. Any liquidity pressure from Prosus sales has been fully neutralized.
Per influencer "仓总加措"’s long-term tracking of Tencent shareholder activity, the company’s current buyback pace renders Prosus’s moves irrelevant.
While HKEX rules previously mandated buyback cancellations, new policies don’t. Some now worry uncanceled Tencent repurchases might dilute shareholder returns.
We believe such concerns are overblown. Given Tencent’s shareholder-friendly reputation, uncanceled buybacks seem unlikely. Its financials show all 2023’s 150 million repurchased shares were canceled. Since ramping up buybacks in 2022, outstanding shares have steadily declined from 9.6 billion to 9.35 billion.
Another key Tencent driver: market expectations—specifically earnings. For a company its size, delivering 54% YoY non-IFRS net profit growth in Q1 is remarkable.
As we’ve noted (see: Q1 流水转正，企鹅国内游戏反转信号越来越明显了), markets price in expectations—including business trends. Tencent’s Q2 gaming recovery is certain, with new titles like DNF Mobile and Brawl Squad complementing evergreen hits (Honor of Kings, Peacekeeper Elite, Golden Shovel).
Beyond gaming, WeChat’s newer ventures—Video Accounts, Mini Programs, Official Accounts, and Search—are maturing into high-margin revenue streams. After disclosing Video Accounts ad revenue last Q2, markets await potential updates this quarter.
Meituan, meanwhile, faces diminished threats from Douyin and Ele.me in food delivery. Its successful Hong Kong expansion has investors bullish on overseas growth, driving valuation reassessments.
By contrast, JD.com and Alibaba grapple with e-commerce competition. PDD’s rise keeps them on edge—only clear competitive wins will revive market confidence.
Ultimately, buybacks alone don’t lift stocks—investors buy companies. Long-term fundamentals matter most. Among these giants, we favor Tencent and Meituan, whose buybacks and earnings provide tangible reassurance!
Source: StockPro
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