(Yicai Global) April 30 -- Ping An Insurance Group Company of China plans to use CNY5 billion (USD742 million) to CNY10 billion of its own funds to repurchase its domestically traded A-shares.

Its 2018 shareholders meeting approved the resolution yesterday, it said in a statement on the same day.

Shenzhen-based Ping An's Shanghai-listed shares [SHA:601318] closed up 4 percent at CNY86.4 (USD12.8) yesterday, even as the Shanghai Composite Index fell 0.8 percent overall.

The company's board of directors proposed to use its own funds of between CNY5 billion and CNY10 billion to repurchase shares through centralized bidding and use the shares for its employee stock ownership plan, including its long-term service plan, it announced in the middle of last month. The main purpose of this service plan is to encourage long-term employment and service of core talents by providing a motivation mechanism.

The repurchase price will not exceed CNY101.24 (USD15) per share and the buyback which started yesterday will go on to next April 28, the statement said.

The firm will cancel the treasury stocks generated after the repurchase if it does not use them up within three years, such as in employee stock ownership plans, under its current rules, Yao Bo, chief financial officer of Ping An told the shareholders meeting, state media The Economic Observer reported.

Ping An chose to buy back its A-shares rather than Hong Kong-listed stocks [HKG:2318] since the latter imposes stricter requirements on repurchases and treasury stock and is less flexible as a firm must cancel stocks upon repurchase, Yao Bo further explained.

Ping An released its first quarter report yesterday, in which it posted CNY45.5 billion in net profit attributable to shareholders of its parent company, a 77 percent rise on the previous year. This means the firm's daily net profit was more than CNY500 million (USD74.2 million).

Editor: Ben Armour