JD Boosts Share Buyback as China Clampdown Weighs on Tech

  • Its stock tumbled 25% this year following Beijing’s scrutiny
  • E-commerce giant is boosting its buyback program to $3 billion

JD.com Inc. is boosting its share buyback plan by 50%, 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 $3 billion for the buyback program, which will be extended until March 2024, it said in a filing Wednesday. That’s up from the $2 billion it had targeted under the plan originally adopted in March 2020. JD fell as much as 2.1% 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 Ltd. last week to distribute more than $16 billion of its JD shares has also weighed on the retailer. The Hang Seng Tech Index’s 1.5% loss Wednesday added to a 34% 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 Ltd. in August announced it will boost its repurchase program by 50% to $15 billion, while Tencent resumed buying back shares over the summer. Xiaomi Corp. in March also announced a HK$10 billion ($1.3 billion) share buyback plan.

JD on Wednesday unveiled a five-year green loan facility of $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.

Author: Sarah Ya-Ru Zheng, Bloomberg

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