Tianyin Communications Holding Co., Ltd. Repurchase Case Analysis

In the beginning of 1990's the stock market is just in the embryonic stage in China. How to develop the capital market, put the stock market into full play of financing function and serve for the enterprise reform is the core issues discussed both theoretically and practically, whereas, stock repurchase, being a means of company management, has just been acknowledged since the past recent years. Listed companies are aware of the way to increase company value by taking advantage of various capital operation means and tools including stock repurchase which also impact the governance structure, capital structure and dividend policy. Stock repurchase has been gradually adopted by Chinese listed companies as means and tools of capital operation.In this case, the research and discussion on stock repurchase, not only can solve the standardization issue on capital structure of listed companies, but also have positive meaning of driving the development and innovation of Chinese listed companies and capital market.With case analysis, inductive analysis and positive analysis, this article firstly sets forth the background, necessity, and meaning of stock repurchase and then deeply analyzes the stock repurchase theory by combining the most popular theories both domestically and abroad together with the case of Telling Telecommunication Holding who firstly repurchase the stock in China A share market.The text consists of 5 chapters. Chapter I Introduction which introduces the research meaning and research method. Chapter II sets forth the meaning of stock repurchase, theory on stock repurchase effect, 3 hypothesis and basic model on stock repurchase. Chapter III introduces the research updates abroad. Chapter IV is the core of the thesis, introduces the specified case: analysis on basic background of Telling Telecommunication Holding Co., Ltd., mainly analysis on development between 1997 to 2008 including the equity interest changes, core business changes and 12 years'financial analysis, analyzing the repurchase case of telling Telecommunication Holding including the repurchase progress, basic motive analysis, deeply motive analysis, the EPS verification of hypothesis, signal hypothesis analysis on long term valuation. Chapter V conclusion: After the Telling Telecommunication Holding repurchased its stock due to the small repurchase volume , the company value doesn't increased , neither does the financial structure improved. EPS effective motive is not effectively approved. The verification on repurchase announcement indicates the announcement had already delivered the information to the market and Chinese market reacted in advance of the information delivery; the verification on long term stock price movement indicates although after repurchase, the stock price of Telling Telecommunication holding is in rising state, the increase of Telling is less than that of the whole stock market.