Furui: Maintain the “Buy” rating of Wanzhou International and the target price is HK$8.5. Positive view on the company’s stock repurchase. Provided by Zhitong Finance

Zhitong Finance APP learned that Jefferies released a research report and maintained the “Buy” rating of Wanzhou International (HK:) (00288) with a target price of HK$8.5. According to the report, the company proposed to repurchase up to approximately 1.917 billion shares at 7.8 yuan per share (HK$, the same below), accounting for approximately 13% of the issued shares. The bank believes that this move is a positive and favorable measure to support the company’s share price.

It is reported that the repurchase price per share closed at 6.805 yuan compared with before the suspension, a premium of about 14.6%, and the repurchase of shares was nearly 15 billion yuan. Furui said that the company’s 2021 and 22 price-to-earnings ratios are 10 times and 9 times respectively, compared to its long-term average of 11 times. In addition, the company’s debt-to-equity ratio at the end of 2020 is 27%, which means that the company has a lot of room for raising debt levels. The bank expects that the cancellation of the repurchase of shares will increase its earnings per share by 15%.