The Research On The Financial Effect Of Share Repurchase Of Jiangzhong Pharmaceutical Co.,Ltd.

Share repurchase first appeared in the 1970s in the United States,then gradually influenced and developed all over the world.Share repurchase appeared late in the capital market of our country and share repurchase appeared in China for the first time in the 1990s.In 2005,since China launched the reform of split share structure and issued relevant management methods and supplementary provisions,the number of share repurchase of listed companies in China has been increasing year by year.Nowadays,share repurchase has become a widely used method of capital operation,which has attracted the attention of listed company managers,market investors and government authorities.Based on this,the paper takes the share repurchase as the research object,selects the Jiangzhong Pharmaceutical Co.,Ltd.'s share repurchase event as the case,relies on the basic theory of the stock repurchase effect,and probes deeply into the financial effect of the Jiangzhong Pharmaceutical Co.,Ltd.'s share repurchase,in order to provide some experience for listed companies to buy back shares.The paper uses normative research method and case analysis method and the paper is divided into five chapters.They are the introduction,the concept and basic theory of share repurchase,the case analysis,the case inspiration and the conclusion.In the case analysis,the paper studies the financial effect of share repurchase by event study method and financial index analysis method.The study found that:the share repurchase does have the financial effect of the time point of the repurchase plan announcement,which will stimulate the rise of the stock price in a short time;share repurchase can improve earnings per share;share repurchase can improve the company's capital structure;share repurchase can make full use of free cash flow and reduce agency cost;share repurchase also has dividend substitution effect.The repurchase of shares has brought a positive impact on the Jiangzhong Pharmaceutical Co.,Ltd.,but share repurchase also reduces the short-term solvency and the stabilizing effect on the stock price is only a short-term effect.Then,based on the experience and lessons of Jiangzhong Pharmaceutical Co.,Ltd.'s share repurchase,here are some enlightenment as follows:listed companies should actively explore the role of share repurchase in the new environment,the proper use of share repurchase will benefit the enterprises;at the same time,in the process of share repurchase,listed companies should pay attention to strengthening information disclosure and strictly standardizing the behavior of large shareholders;finally,the listed company should pay attention to the risk of share repurchase,they should pay attention to the short-term effect of stock repurchase and the financial risk.