In-depth Analysis of NovaStar's Share Repurchase Plan

NovaStar (301589) released the fourth phase share repurchase announcement on December 16, 2025, planning to repurchase company shares through centralized bidding transactions using its own funds or self-raised funds [1][2].

• Repurchase amount: RMB 75 million to 150 million
• Maximum repurchase price: RMB 240 per share
• Estimated number of shares to repurchase: 310,000 to 630,000 shares
• Proportion of total share capital: 0.34% to 0.68%
• Purpose of repurchase: Equity incentives, employee stock ownership plans, or conversion of convertible corporate bonds [1]

NovaStar is a leading enterprise in China’s LED display control system field, focusing on the R&D and application of core algorithms for video and display control [4]. The financial data for the first three quarters of 2025 shows:

• Operating revenue
  : RMB 2.415 billion, up 1.84% year-on-year
• Net profit attributable to shareholders
  : RMB 445 million, down 3.34% year-on-year
• Non-recurring net profit attributable to shareholders
  : RMB 416 million, down 7.05% [1]

The company’s performance in the third quarter of 2025 was relatively stable:

• Operating revenue: RMB 882 million, up 9.13% year-on-year
• Net profit attributable to shareholders: RMB 151 million, up 10.9% year-on-year
• Non-recurring net profit attributable to shareholders
  : RMB 130 million, down 3.41% [3]

According to market data, NovaStar’s stock price has been under significant pressure recently:

• Closing price on November 21
  : RMB 155.9
• Weekly decline
  : 10.09% (as of the week ending November 21)
• Current market capitalization
  : Approximately RMB 14.413 billion
• Turnover rate
  : 183.0% (reflecting high trading activity) [3]

From a historical trend perspective, the company’s stock price has undergone significant adjustments, falling sharply from previous highs to the current level, indicating that the market has certain concerns about the company’s future growth prospects.

• Maximum repurchase price
  : RMB 240 per share
• Recent stock price
  : RMB 155.9 (closing price on November 21) [3]
• Premium space
  : Approximately 54%

1. Valuation support perspective
   : The maximum repurchase price of RMB 240 per share has an approximately 54% premium over the current stock price, which seems overly aggressive on the surface.

2. Industry valuation level
   : Referring to the valuation of related companies in the optical communication/LED display control industry, the industry’s expected PE level for 2025 is between 36.9 and 43.0 times [5]. Given NovaStar’s profitability and industry position, an appropriate premium is reasonable.

3. Historical price reference
   : Considering that NovaStar’s stock price has undergone significant adjustments, the maximum repurchase price may be based on the judgment of the company’s intrinsic value rather than entirely on the current market price.

4. Repurchase strategy consideration
   : A high repurchase price ceiling is usually to have sufficient operating space when the stock price rebounds, while conveying the company’s confidence in future development.

• Proportion of repurchase funds
  : Based on the maximum repurchase amount of RMB 150 million, the proportion of total assets and net assets is small, which will not have a significant impact on normal operations
• Sufficient own funds
  : The company has a good cash flow situation and has the financial strength to implement the repurchase
• Batch implementation
  : The centralized bidding method can be executed in batches over a long period to reduce the average cost

1. Boost market confidence
   : Repurchase plans are usually interpreted as a signal of management’s confidence in the company’s prospects, which may support the stock price in the short term
2. Reduced liquidity
   : Repurchasing 310,000 to 630,000 shares will reduce the circulating share capital by 0.34% to 0.68%, theoretically increasing the value per share
3. Technical support
   : After the stock price has undergone major adjustments, the repurchase may provide technical support

1. Foundation for equity incentives
   : Repurchased shares are used for equity incentives, which helps bind core talents and promote long-term development
2. Optimization of financial structure
   : Moderate share repurchases can improve financial indicators such as ROE
3. Market value management tool
   : Repurchasing when the stock price is undervalued reflects the company’s value management awareness

1. Capital use efficiency
   : If the stock price continues to fall, high-priced repurchases may lead to poor capital use efficiency
2. Limited market response
   : The repurchase scale is relatively small (less than 1% of total share capital), and the actual driving effect on the stock price may be limited
3. Industry prosperity
   : The LED display control industry is highly competitive, and continuous improvement of the company’s fundamentals needs to be paid attention to

• Reflects management’s confidence in the company’s long-term development
• Provides a source of shares for equity incentives
• Repurchasing at a low stock price has a certain value investment logic

• The maximum repurchase price has a high premium over the current stock price, so it is necessary to observe the actual execution price
• The repurchase scale is limited, and the effect on overall valuation improvement is relatively mild
• Comprehensive evaluation needs to be combined with the improvement of the company’s fundamentals

1. Short-term wait-and-see
   : Pay attention to the actual execution of the repurchase and market reaction
2. Fundamental tracking
   : Focus on the company’s performance improvement trend and changes in industry prosperity
3. Valuation judgment
   : The current stock price has reflected a lot of pessimistic expectations. If there is an inflection point in fundamentals, there is room for repair

NovaStar’s share repurchase plan has positive strategic significance. Although the maximum repurchase price of RMB 240 per share has a high premium over the current stock price, it still has certain rationality considering the company’s industry position, historical stock price level, and repurchase flexibility. However, the substantial improvement of the repurchase on valuation needs to be accompanied by the continuous improvement of the company’s fundamentals. Investors should pay attention to the execution effect of the repurchase and the sustainability of the company’s performance improvement.

[1] Eastmoney - “NovaStar plans to repurchase RMB 75 million to 150 million” (https://finance.eastmoney.com/a/202512163593233613.html)
[2] Daily Economic News - “NovaStar: Plans to repurchase company shares of RMB 75 million ~ 150 million, repurchase price not exceeding RMB 240 per share” (https://finance.eastmoney.com/a/202512163593191255.html)
[3] StockStar - “NovaStar (301589) Weekly Review: Down 10.09% this week, main funds net outflow in total…” (http://stock.stockstar.com/RB2025112300008606.shtml)
[4] Zhihu - “2024 NovaStar Research Report Collection” (https://www.zhihu.com/tardis/zm/art/684797404)
[5] Kaiyuan Securities Research Report - “Resonance of three major businesses, building an AI optoelectronic leading enterprise” (https://pdf.dfcfw.com/pdf/H3_AP202511191784428924_1.pdf)