Case Study On Stock Repurchase Of Midea Group

With the development of China’s economy and the continuous maturity of the capital market,stock repurchases have gradually become an operating tool of the capital market.The role of stock repurchase is diverse.The most direct is to reduce the share capital and improve the shareholding structure of listed companies.In addition,the repurchase can also stimulate the stock price to increase and improve the company’s operating performance.In recent years,China ’s listed companies have gradually increased their participation in stock repurchases,especially since the revision of the relevant content of the company law on stock repurchases in October 2018 has increased the availability of stock repurchases and extended the implementation period for stock repurchases.The number of listed companies that are repurchasing stocks is increasing.According to statistics,in 2018,A shares ushered in a big year for listed companies to repurchase,and the total number of stock repurchases hit a record high.In this thesis,Midea Group’s 4 billion repo amount has undoubtedly become the most compelling repo.The thesis researches Midea Group’s stock repurchase,analyzes the reasons and effects of stock repurchase,and hopes that the research of the thesis can be inspired by other listed companies.The thesis uses a combination of theoretical analysis and case analysis.The theoretical part expounds the concepts and main methods of stock repurchases,relevant theoretical foundations,and China’s current regulations on stock repurchases.The case study part first introduces Midea Group,including Midea Group ’s main business,the company ’s controlling shareholders and actual controllers.Second,sort out the entire process of Midea Group ’s stock repurchase,including the background of stock repurchase and the main content of stock repurchase.Thirdly,the thesis studies some of the effects of Midea Group’s stock repurchase: using the event research method to analyze the market effect of Midea Group’s stock repurchase;using the financial index analysis method,through trend analysis and peers with the same size of the two assets The company’s horizontal comparison method evaluates the financial effect of Midea Group’s stock repurchase;by calculating the equity ratio and weighted average cost of capital after Midea Group’s stock repurchase to determine the changes in equity structure and capital structure,the study found that: 1)The actions of Midea Group’s stock repurchase are complicated and hidden,and are not completely consistent with the content announced at the time.2)The short-term stock price increased after Midea Group’s stock repurchase,but the long-term effect is not obvious.3)Midea Group ’s share capital structure and capital structure after stock repurchase did not change significantly,and stock repurchase utilization rate was not high.4)Midea Group’s stock repurchase has both positive and negative effects on financial performance.Finally,the thesis combines the case analysis conclusions to draw lessons and enlightenment from corporate investors,listed companies themselves,and related accounting standards and legal aspects.Investors of the company should rationally view the stock repurchase behavior of the listed company.The listed company itself should choose the appropriate timing of the repurchase,properly use the positive effects of the stock repurchase,increase the stock repurchase utilization rate,and protect the legal rights of small and medium shareholders.Relevant accounting standards and laws should also relax stock repurchase conditions and give support to stock repurchase policies.