JD.com boosts share buyback as China clampdown weighs on tech

[HONG KONG] JD.com is boosting its share buyback plan by 50 per cent, the latest in a slew of tech firms to repurchase stock after China's regulatory crackdown over the past year sparked a selloff.

The country's No 2 online retailer will set aside US$3 billion for the buyback programme, which will be extended until March 2024, it said in a filing Wednesday (Dec 29). That's up from the US$2 billion it had targeted under the plan originally adopted in March 2020.

JD fell as much as 2.1 per cent on Wednesday as Chinese technology shares in Hong Kong extended their declines. Shares of the e-commerce firm have tumbled as part of a wider rout in tech stocks as Beijing stepped up oversight of issues such as antitrust to data security, while a surprise move by top investor Tencent Holdings last week to distribute more than US$16 billion of its JD shares has also weighed on the retailer.

The Hang Seng Tech Index's 1.5 per cent loss Wednesday added to a 34 per cent slump for the year, after regulators over the past week proposed new rules that would increase scrutiny of firms seeking to sell shares overseas.

In response, firms are stepping up efforts to repurchase shares and reward investors. Rival e-commerce behemoth Alibaba Group Holding in August announced it will boost its repurchase programme by 50 per cent to US$15 billion, while Tencent resumed buying back shares over the summer.

Xiaomi in March also announced a HK$10 billion (S$1.7 billion) share buyback plan.

JD on Wednesday unveiled a 5-year green loan facility of US$2 billion, its first such financing for new and existing green projects.

Under President Xi Jinping, China has made reaching carbon neutrality by 2060 a strategic priority and many tech firms regard participating in green efforts as a way to engender greater goodwill with the government.

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