CHANJET (HKG:1588) saw its stock price plummet by 5.32% in intraday trading, following the company's announcement of a share buyback plan and intention to use its capital reserve to offset accumulated losses.

The Hong Kong-listed company revealed plans to repurchase and cancel 3.5 million domestic shares under its employee share ownership scheme. This includes 2.2 million unlocked incentive shares at 7.30 yuan per share and 1.4 million shares at 6.05 yuan per share for which unlocking conditions were not met. The total consideration for this buyback is 24.1 million yuan, which will be funded from the company's own resources.

Additionally, CHANJET disclosed its intention to use 207.1 million yuan from its capital reserve to fully offset accumulated losses as of December 31, 2024. This move will reduce the company's capital reserve balance to 597.8 million yuan. The company also entered into a connected share repurchase agreement with its employee shareholding platform for 938,000 domestic shares at 6.5 million yuan. Following the completion of these actions, CHANJET's total issued shares will decrease to 322.1 million, with domestic shares reducing from 189.9 million to 186.3 million.

Investors appear to have reacted negatively to these announcements, possibly due to concerns about the reduction in the company's capital reserves and the potential dilution of share value. The sharp decline in stock price suggests that the market is reassessing CHANJET's financial strategy and its implications for future growth and shareholder value.