China Nepstar Chain Drugstore, one of China’s largest pharmacy networks, is to launch a share buyback program to boost its stock price.

Under the terms of the Share Repurchase Program, the company may repurchase up to US$5 million worth of its issued and outstanding American Depositary Shares from time to time over the next 12 months.

The repurchases will be made on the open market at prevailing market prices or in block trades as regulations allow. The timing and extent of any repurchases will depend upon market conditions, the trading price of the ADSs, the nature of other investment opportunities presented to the company, the company’s cash flows and expected cash flows, general economic conditions, regulatory requirements and other factors, the company said in a statement.

“We are committed to enhancing shareholder value,” said Fuxiang Zhang, Nepstar’s CEO, “and we believe that given the operational improvements and sales momentum that we gained in the past year, our current share price is undervalued. We are confident in our long-term growth prospects and believe that a share repurchase program will benefit our shareholders.”

China Nepstar Chain Drugstore, listed on the New York Stock Exchange, is a leading retail drugstore chain in China. As at the end of September it had 2048 directly operated stores across 77 cities, one central distribution center and 16 regional distribution centers in China. Nepstar uses directly operated stores, centralised procurement and a network of distribution centers to provide its customers with high-quality, professional and convenient pharmaceutical products and services and a wide variety of other merchandise, including OTC drugs, nutritional supplements, herbal products, personal care products, family care products, and convenience products.

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