Research On The Motivation And Effect Of Yonghui Supermarket Stock Repurchase

In recent years,China's economy has achieved remarkable results in the entire capital market environment.Many companies have gradually begun to use stock repurchase to conduct capital operations and corporate management in the capital market.However,there are many motivations for stock repurchase.Among them,companies want to use this method to reduce the company's share capital and adjust the company's overall equity composition.Some companies choose to buy back stocks from the secondary market to provide equity incentives to promote the growth of the company.progress.Because the causes and effects of stock repurchase are very extensive,the analysis of stock repurchase is very important.Because the capital markets of western countries developed earlier,stock repurchase behaviors have also occurred for a long time,and have always played a leading role in the entire process of stock repurchase.The rise of stock repurchases in China has been early,and research on stock repurchases is relatively simple,and most of them are modeled after Western countries.However,with the continuous development of China's economy and the continuous improvement of the securities market,scholars and company management have discovered the differences in China's securities market,and should conduct more in-depth research on stock repurchases in light of China's characteristics.The China Securities Regulatory Commission introduced the "Administrative Measures on Listed Companies Repurchasing Social Public Shares" in 2005.The trial implementation of this method has led to an increase in the number of companies using listed companies in our country.On October 26,2018,the Sixth Meeting of the Standing Committee of the Thirteenth National People's Congress of China held a meeting to review and approve the amendments to the special provisions of Article 142 of the Company Law on corporate stock repurchase.It will be implemented from the date of announcement.This also means that stock repurchases ushered in more standardized implementation conditions and situations.This article mainly uses the analysis methods of case studies,combined with literature analysis methods,event research methods and other research methods to analyze and discuss the causes and effects of Yonghui supermarket stock repurchase.After collating the relevant literature and some related theories of stock repurchase,this article gives a brief description of the operating status of Yonghui Supermarket and its stock repurchase,and sorts out the process of the stock repurchase.This article focuses on the fourth and fifth chapters of the full text.This article first analyzes the possible motivations of Yonghui Supermarket's stock repurchase and explores what the implementation of the stock repurchase has produced for Yonghui Supermarket.Impact,analyze whether the implementation of this measure meets its motivations,and put forward effective improvement opinions for the company.In the analysis of the causes of the Yonghui Supermarket's stock repurchase case,it can be found that the Yonghui Supermarket's stock repurchase is not intended to replace the cashdividend distribution,but its main motivation is to implement equity incentives to promote the development of enterprises.At the same time,enterprises also hope to increase financial leverage through stock repurchase and adjust to a reasonable capital structure;stabilize the downward stock price;dispose of idle funds and reduce agency costs.Based on the analysis of the causes,the article analyzes the financial effects of Yonghui Supermarket's stock repurchase.It mainly researched from the business performance of the company,the capital structure of Yonghui Supermarket,the stock price of the company and the wealth of shareholders.It is found through research that the stock repurchase of Yonghui Supermarket has indeed improved the company's capital structure,raised the company's stock price for a period of time,and improved the company's ability to pay its debts.However,from a long-term perspective,the profitability of the company has not been optimized,the positive impact of the stock price has been very short,and the shareholder wealth has not increased significantly.Therefore,this article gives the following suggestions:(1)Improve and innovate incentive plans.(2)Enterprises should understand stock repurchases in depth.Stock repurchases cannot change the trend of long-term stock prices.(3)Enterprises should measure the advantages and disadvantages of stock repurchase to determine the appropriate repurchase method that fits the enterprise.