China's CXMT Doubles Buyback to Up to 5 Billion Yuan, Shares Surge 13%

Buyback raised to 2.5 billion-5 billion yuan, largest ever on Shanghai's STAR Market

Third-quarter results also released; revenue jumps sixfold and net profit turns positive

ChangXin Memory Technologies, China's largest DRAM maker, said in a filing with the Shanghai Stock Exchange on Nov. 4 that it plans to double its share buyback program to as much as 5 billion yuan, or about $690 million.

Sina Finance and China Business Journal reported that Chairman Zhu Yiming had decided in late October to buy back 1 billion yuan to 2 billion yuan of the company's shares, before revising the plan. He raised the buyback range to 2.5 billion yuan to 5 billion yuan.

That is the largest buyback ever on the STAR Market, the Shanghai exchange's technology-focused board.

Zhu said the decision reflected confidence in the company's continued development and rising corporate value. The move was also aimed at protecting investor interests and strengthening confidence in the company, he added.

CXMT also disclosed its third-quarter results in the filing. Third-quarter revenue rose 613.18% from a year earlier to 11.8714 billion yuan, while net profit reached 5.4435 billion yuan, swinging from a loss a year earlier.

The company said the strong third-quarter performance was driven by continued surging demand for DRAM, which sharply lifted product sales and prices. It added that gross margin for the quarter was 89.53%, maintaining solid growth.

On the news, CXMT shares surged 13.63% on the STAR Market on Nov. 4 to close at 44.09 yuan.

Lee Mi-ah, Hankyung.com reporter mia@hankyung.com