Analysis On The Motive And Effect Of Changbao Stock Repurchase

In recent years,China's social and economic development is closely linked with the international market,and the role of financial capital is increasingly prominent.More and more laws and regulations have been amended to improve the standardization of the share repurchase system.The new Company Law was issued in 2018,which gives companies more independent choices,ADAPTS to different needs of investors,and has a far-reaching impact on the repurchase system.Under the guidance of the government and the market,the number of stock repurchases has been increasing year by year in recent years.By 2018,147 listed companies had completed stock repurchases with a total amount of 23 billion yuan.Each has a different set of considerations,which highlights the urgency of studying share buybacks.At present,most of the researches on this subject remain superficial theoretical studies,lacking the use of data to fully understand the behavior of stock repurchase.Therefore,the research on stock repurchase in this paper complies with the development of the market and provides reference significance for investors and companies.In this paper,the public share repurchase implemented by Chang Bao Stock Co.,Ltd.in 2018 is taken as the object of study.With the use of corporate financial data and information publicly available in the market,the motivation of corporate repurchase is studied from multiple perspectives,and the psychology of the implementation of this measure is actively explored.At the same time,comparative analysis,event research and other methods are used to analyze the effect of Chang Bao share repurchase.Through the study of the case,it is concluded that the motives of Chang Bao's share buyback are to convey positive signals,improve the efficiency of free cash use,stimulate financial leverage,and replace cash dividend payment.After the stock repurchase is completed,the company's profitability is greatly improved,the use efficiency of its own capital is enhanced,and the financial leverage is stimulated.However,the stock repurchase still has a certain negative impact on the company's long-term solvency.At the same time,the short-term market effect is more obvious,the repurchase announcement when the stock price was quickly pulled up.It is found in the long run that the stock price trend is continuously falling,which indicates that the stock repurchase has a certain positive effect on the company's stock price in the short term,but the effect will gradually weaken over time.By summarizing the case study,the paper proposes Suggestions such as buying back shares to enhance the share price,making a buyback plan according to their own situation,and optimizing the operation and management to realize value,hoping to deepen the rational understanding of other joint-stock companies and investors on share buyback.