Research On Motivation And Financial Effect Of Midea Group’s Share Repurchase

Share repurchase originated in western capitalist countries and is widely used as a way of capital operation.Share repurchase plays an important role in maintaining enterprise value,promoting the implementation of equity incentive plan,preventing merger and acquisition,and optimizing capital structure.In recent years,with the standardization and development of China’s capital market and the improvement of related policies and regulations on repurchase,the phenomenon of share repurchase by listed companies has gradually increased.In 2018,782 listed companies on the a-share market carried out repurchase programs,with the amount of repurchase reaching 617.02 billion yuan.The scale and amount of repurchase reached A record high.Midea group buy scale ranked among the top class A shares,at the same time in the home appliance industry leading position,look from the repurchase size and industry position,based on the midea group share repurchases as the breakthrough point,to study the typical stock repurchase behavior,help to enrich Chinese stock repurchase motivations and financial effect research theory,provide reference and reference for our country listed company capital operation.Based on the theory of signal transmission and principal-agent theory,this paper uses literature research method and case study method to conduct research.Taking midea group stock repurchase as an example,this paper makes an in-depth analysis of the motivation and financial effect of stock repurchase.First,this paper introduces the background and research significance of the topic,systematically sorts out relevant domestic and foreign literature on the motivation and financial effect of stock repurchase,and determines the research methods and ideas.Secondly,it explains the concepts related to stock repurchase,the theory of stock repurchase motivation and the theory of financial effect.Thirdly,it introduces the general situation of midea group and the background of repurchase,and expounds the repurchase plan.Based on the stock repurchase motivation theory and the company’s business strategy,this paper analyzes the stock repurchase motivation of midea group.The repurchase motivation mainly includes the maintenance of enterprise value,the implementation of equity incentive plan,the absorption of merged cygnets and the substitution of cash dividends.Based on the company’s quarterly and annual reports from 2017 to 2019,the financial effect analysis of stock buyback can be divided into financial performance analysis and market performance analysis.Finally,from the motivation and financial effects of the dimensions of the research conclusions and obtain research inspiration.Through the research,the following conclusions are drawn: midea group’s share repurchase motivation is to maintain the enterprise value,implement the equity incentive plan,absorb the merger cygnets,replace the cash dividend,etc.The repurchase announcement reveals the motivation on the surface,and there are deep motivation worth exploring.Share repurchase has brought some financial effect.The equity incentive plan stimulates the improvement of profitability and produces short-term positive market performance.Taking midea group as the case study object,this paper studies the motivation and financial effect of stock repurchase,which is helpful for investors to have a correct understanding of stock repurchase,promote enterprises to make rational use of the stock repurchase policy,regulate the stock repurchase behavior of listed companies,and strengthen the supervision of listed companies.