The BVI company Qiao Xing Universal Telephone Inc., one of the leading mobile phone manufacturers and distributors in China, said that its mobile telephone unit will begin a $20 million buyback program. The company will fund repurchases made under the program from available working capital.
Wu Zhi Yang, vice chairman of Universal Telephone and chairman of the mobile unit, noted in his statement concerning the buyback that it “reflects our ongoing commitment to increase shareholder value and confidence that the current share price levels do not reflect our current potential value.”
It is normal practice for companies to repurchase shares in case when they feel their stock is undervalued. Repurchasing stock takes company's shares out of circulation, increases the value of existing shares and the profits measured per-share. In case with BVI-registered Qiao Xing, the stock is 70% down since the beginning of the year.
