In the capital market, treasury stock is always a sensitive topic. Even a single piece of information regarding a plan to buy or sell treasury stock can trigger a strong short-term market reaction. However, for long-term shareholders and institutional investors, the core issue lies not in the immediate price fluctuations but in the quality of the capital allocation decision behind that action.
Based on this approach, HVA Group organized the HVA Finance Talk #4 program with the theme "Treasury Stock Management – The Boundary Between Creating Value and Creating Expectations". The program focused on analyzing treasury stock as a capital management tool, placed within the context of corporate finance, the Vietnamese legal framework, and the accountability of listed companies.
The talk was moderated by host Giang Mi, representative of HVA's Investor Relations department, and guest speaker Ngo Ngoc Quang, lecturer at the University of Banking and wealth management advisor at Wealth Done.
Treasury stock: More than just a market signal
Right from the beginning, the program clarifies a commonly misunderstood point: buying back treasury stock is not simply a reaction to market sentiment. The essence of treasury stock is that a company uses shareholder funds to repurchase its own shares, thereby directly impacting its capital structure, share value, cash flow, and financial stability.
Therefore, this is not a short-term technical decision, but rather a strategically significant capital allocation choice. Without financial discipline or alignment with long-term goals, treasury stock may create short-term expectations but undermine market confidence in the management's long-term governance capabilities.
The fine line between values and expectations.
A key focus of HVA Finance Talk #4 is analyzing the boundary between creating sustainable shareholder value and generating psychological expectations in the market. Announcing a share buyback program might cause a positive reaction in the stock price, but that doesn't necessarily mean the company's value has improved.
Value is only created when the decision to buy back treasury stock aligns with financial capacity, actual cash flow, business context, and long-term development strategy. When used as part of an overall capital allocation strategy, treasury stock can reflect prudent governance and responsibility towards shareholder interests. Conversely, if it is only intended to create short-term signals, governance and reputational risks will soon become apparent.
Lessons from Berkshire Hathaway and disciplined capital allocation thinking.
Speaking at the program, Mr. Ngo Ngoc Quang emphasized that the mindset regarding capital allocation directly reflects the "heart" and "vision" of a business leader. Globally, Warren Buffett and Berkshire Hathaway are prime examples of this approach.
Throughout its operations, Berkshire Hathaway only buys back its own shares when the decision meets a clear economic rationale, based on strict investment discipline, rather than aiming for short-term price effects. This disciplined approach is the foundation upon which Berkshire Hathaway builds sustainable long-term value.
Based on that experience, the guest speaker outlined three core principles in capital allocation thinking related to treasury stock. First, only buy when the stock is undervalued compared to its intrinsic value, thereby truly creating value for shareholders. Second, the buyback decision must not weaken the financial health of the business; it needs to maintain a level of safety and resilience to risk. Third, all activities must be conducted on a transparent and accountable basis, fully complying with legal requirements and information disclosure.
Without one of the three elements—fair valuation, financial safety, and transparency—share buybacks can easily become a tool for generating short-term expectations rather than delivering long-term value to shareholders.
The legal framework and transparency requirements are becoming increasingly stringent.
The program also devoted significant time to analyzing Vietnam's legal framework related to the purchase and sale of treasury shares. In the context of increasingly refined regulations aimed at enhancing transparency, requiring full disclosure of information, and improving accountability of listed companies, a correct understanding and adherence to the law becomes fundamental.
Legal compliance is not only a mandatory requirement but also a measure of corporate governance quality. The way a company approaches treasury stock directly reflects its perspective on risk management, shareholder protection, and building long-term market confidence.
HVA's perspective and approach
In the shareholder update, representatives from HVA's IR department shared an overview of the company's recent performance, including the progress of key projects, strategic direction for financial and technological implementation, and outstanding governance achievements.
Regarding treasury stock, HVA emphasized that the company has not yet conducted any treasury stock buyback activities. HVA is currently in the research and development phase of appropriate access criteria. If this tool is used in the future, HVA intends to approach it cautiously, transparently, and in full compliance with legal regulations.
This perspective reflects how HVA views treasury stock as a sensitive capital management tool that should only be considered within the context of a long-term value strategy, rather than reacting to short-term market fluctuations.
Watch the livestream replay: Here
Conclusion
HVA Finance Talk #4 concluded with a comprehensive overview of treasury stock as a capital management tool requiring discipline, transparency, and long-term thinking. Through analyzing the boundary between creating sustainable value and generating market expectations, the program contributed to clarifying the role of capital allocation and accountability in the governance of listed companies.
The HVA Finance Talk series is built by HVA as a space for serious financial dialogue, where topics of governance, market, and strategy are approached based on long-term data and standards. We look forward to seeing you at HVA Finance Talk #5 for more content, continuing our journey with the community in enhancing financial literacy and sustainable investment thinking with HVA.
