Analysis On Midea Group For Motivation And Effect Of Share Repurchase

At present,stock repurchase is a very important means for listed companies to reduce capital and adjust share structure.It mainly refers to the behavior of buying back the relevant shares that have been sold before from the capital market.In essence,it is a way of capital operation,which is conducive to the continuous optimization of the capital structure of the enterprise,and can also play a certain role in promoting the value of the stock.Compared with many western countries,China's stock repurchase started relatively late.With the implementation of the measures for the administration of the repurchase of social public shares by Listed Companies in 2005,the behavior of the listed companies in the process of daily operation and management of China's stock repurchase has also shown a growing trend,especially after the outbreak of the financial crisis in 2008,many listed companies' daily operation has been affected by the fact that their stock price is seriously underestimated and their market to net ratio is low Because of its great influence,the stock repurchase has been announced one after another,and it is in this short time that the stock repurchase has become a focus issue in the capital market.In the process of research,this paper uses literature research,case analysis and data analysis to analyze the motives and effects of Midea Group's share buyback,and the main conclusions are as follows:(1)in terms of the motives of Midea Group's share buyback,the following are included: reducing agency costs,adjusting financial leverage,maintaining reasonable valuation of share price and increasing earnings per share To increase the value of stock investment.From the perspective of multiple factors,Midea Group wants to transmit the signal that its stock price is undervalued to the social investors through the way of stock buyback,so as to achieve the purpose of stabilizing its stock price,and at the same time,it also takes into account other factors to a certain extent.(2)From the perspective of buyback effect of Midea Group,it mainly includes the following aspects: significant growth of stock price and obvious short-term market effect.At the same time,stock buyback has a good help for the continuous optimization of the enterprise's equity structure,and for the continuous improvement of the enterprise's solvency,operating capacity,operating performance and long-term cashflow.(3)From the perspective of the negative impact of Midea Group's share buyback,it can be summarized as follows: the long-term effect of raising share price is not obvious,the payment risk of the company is increased,and the interests of small and medium shareholders are damaged.(4)Finally,According to the analysis of the whole case,some suggestions and countermeasures are put forward at the end of the paper.