Analysis Of The Effect Of Share Repurchase Of Xiaomi Group Under The New Company Law

Share repurchase is an act by which a company uses its own funds or other funds to buy back part of its own shares from the market.As an important activity of listed companies,share repurchase can not only bring influence to market participants,but also bring financial influence to enterprises participating in the repurchase activities.It is an important means for enterprises to optimize their internal capital structure and improve corporate governance.Share buybacks started in the United States and were gradually adopted by listed companies in western developed countries.In 1992,as the major shareholder of small yu garden,big yu garden bought back all the shares of small yu garden by agreement and wrote them off.This is the earliest case of share repurchase in China.In the bear market of 2012,some well-run companies began to take note of share buybacks as a way to support their share prices.As a result,share buybacks have started an explosion.In the following years,the number of enterprises conducting share buybacks increased year by year,from 90 in 2013 to more than 500 in 2017.The main motivation of the repo behavior is: to promote the company's share price to protect the purpose;Enhancing market confidence and preventing investors from selling stocks en masse;Equity incentive to reduce the agency cost.In September 2018,the securities and futures commission related departments of the joint research company law drafting of the draft amendment to the company law of the People's Republic of China law,puts forward some Suggestions to modify the relevant provisions of the stock repurchase,including increase in share buybacks,perfecting the stock repurchase decisions of the implementation process,build system of stock shares,and so on,provides the stock repurchase behavior of listed companies is more sufficient legal basis.On November 9,2018,China securities regulatory commission,the ministry of finance and sasac jointly issued the opinions on supporting listed companies to repurchase shares.The opinions relaxed the sources of repurchase funds,appropriately simplified the implementation procedures of share repurchase,and encouraged listed companies to implement equity incentive or employee stock ownership plan.On January 11,2019,the Shanghai stock exchange and the shenzhen stock exchange officially issued and implemented the implementation rules for share repurchase of listed companies,which further provided detailed specifications and guidelines for share repurchase of listed companies.According to wind data,605 listed companies carried out repurchase business in the first 11 months of 2019,with a total repurchase amount of 106.3 billion yuan,while only 520 listed companies carried out 45.1 billion yuan of repurchase business in the whole year of 2018.In this case,enterprises are particularly concerned about the effect of share repurchase on enterprises and the reaction of investors to enterprise repurchase activities.Through the analysis of the effect of share repurchase,on the one hand,managers can make better use of the means of share repurchase to govern enterprises and promote the development of enterprises.On the other hand,it can also make investors better understand the information contained in share repurchase activities,and help investors make more rational judgments.The type of share buyback widely used by listed companies is the open market share buyback because it is more flexible than dividends or other forms of buybacks.This paper adopts the method of case study and selects Millet group,a representative listed company,as the research object in the Hong Kong stock market,the first listed company with different rights of the same shares and a significant amount of share repurchase in the public market in 2019.This paper makes a comprehensive and detailed analysis of the capital operation mode of share repurchase by analyzing the market and financial influence of share repurchase.This paper firstly analyzes the background information of share repurchase,reviews the existing literature of share repurchase at home and abroad,and obtains the research ideas and methods of this paper.Secondly,by analyzing the definition,method and effect of share repurchase,the theoretical basis of share repurchase is further expounded.Finally,this paper analyzes the market effects of share price changes and yield differences of multiple protective buybacks of Millet group in June and September 2019.Then the reasons and financial effects of the repo effect were summarized and analyzed.The following conclusions can be drawn from the case of share repurchase of Millet group.First,there are regrets about the share buyback of Millet,which has not improved the share price and the company's value.Secondly,share repurchase has a positive impact on the ownership structure and shareholders' equity of the company.Share repurchase achieves the purpose of equity incentive,optimizes the equity structure of the company,and increases the equity of the remaining shareholders.Thirdly,share repurchase improves the capital structure and operating performance of enterprises.Millet group carried out share repurchase to reduce the outstanding shares,so as to increase the company's earnings per share,so as to further increase the earnings index.Finally,through Millet group,the managers are made to realize that share repurchase does not always have a significant impact on the stock price,and they should not solely rely on share repurchase to fundamentally affect the direction of the stock price.They should also make proper use of share repurchase to improve the development of the enterprise according to the specific situation of the enterprise and the overall situation of the capital market.In the end,to improve the stock price and the value of the enterprise,it is necessary to put it into practice to improve its own value from the perspective of improving its own business activities.