Motivation And Financial Effect Analysis Of Jiangzhong Pharmaceutical Ltd Stock Repurchase Case

Share repurchase is a behavior of a company to buy back its own outstanding shares,so as to achieve the corresponding goal.Share repurchase originally produced in the western capital market which represented by the United States.After half a century of development,share repurchase is gradually developed a mature way of capital operation.Listed companies can optimize capital structure and enhance the value of the company's purpose by share repurchase,so as to establish a good image of the capital market.Compared with the western developed capitalist countries,share repurchase in our country starts late.And share repurchase in China has a big difference with the western capital market because of the Chinese characteristics.2005 is a historic moment of share repurchase in China,before 2005 the practice of share repurchase in China are rare due to the particularity of the capital market and legal limits.In 2005,the China Securities Regulatory Commission officially promulgated a relevant law.Since then,share repurchase in China really be rules-based means of capital operation,and implementation of the listed companies share repurchase cases become more gradually.This article focus on share repurchase motivation and the financial effect has carried on the comprehensive analysis to the Jiangzhong Pharmaceutical co.ltd.share repurchase case.This analysis result can help to promote the standard and development of share repurchase in China.Finally,the paper summarized and put forward the enlightenment.This paper analyzed the ways to Jiangzhong Pharmaceutical co.ltd.share repurchase case,share repurchase motivations and share repurchase financial effect,and conducted a comprehensive system of analysis and evaluation from the perspective of financial indicators and financial risk's influence on share repurchase by using case study,comparative study,literature research and the methods of inductive analysis.This article selects the Jiangzhong Pharmaceutical co.ltd.share repurchase event as case analysis and will be divided into five parts.The first part is introduction,mainly includes the research background and significance,reviewed the research status of related fields at home and abroad.And it also introduced the ideas and methods and summarized the framework of this paper.The second part is the summary of theory,mainly introduced the concept of share repurchase,the types of share repurchase,the methods of share repurchase,share repurchase motivations and the effect of share repurchase,and also summarized some theory related to this case.The third part is the case introduction,this part analyzed the basic situation of the Jiangzhong Pharmaceutical co.ltd,and introduced the financial background,historical share price performance and historic earnings of Jiangzhong Pharmaceutical co.ltd.share repurchase case.And this part also expounded the process of share repurchase.The fourth part is case analysis,it detailed analyzed the reason of Jiangzhong Pharmaceutical co.ltd.share buybacks and its financial effect.It is the core content of this article.First of all,this article analyzed the reason of share repurchase through the industry environment,operating and company conditions.Secondly,this part analyzed positive financial effect of share repurchase from the capital structure,profit ability and growth ability.Then,it analyzed negative financial effect of share repurchase from the share price,financial risks and paymentcom risks combining with a large number of graphs.The graphs intuitively reflected the changes of each index and analyzed the effect of the share repurchase of the company's financial in the end.The fifth part is the conclusion and enlightenment,mainly introduced that the share repurchase will optimize the capital structure,regulate financial indicators and increase the financial flexibility.And this part also got the inspiration that share repurchase can produce financial risk,and the stock price promotion effect is limited.This conclusion and enlightenment provide reference for other companies to share repurchase.