| The sudden outbreak of COVID-19 in the first half of 2020 mistakenly killed many blue-chip stocks,leading many listed companies to opt for share buybacks.China’s previous share repurchase was only adopted by a small number of companies due to strict government restrictions,so the growth was slow.As the market matures,the number and amount of share repurchases increase.Companies have different motivations for share repurchases at different times.As public markets become more diverse,buyback incentives become more complicated.An in-depth analysis of corporate share buybacks is very important.If the total earnings remain unchanged,the earnings per share will rise,thus raising the company’s stock price.However,in the real market,the effectiveness of pushing up the company’s stock price has yet to be verified.In addition,share repurchase will also have an indirect effect on the company’s financial indicators,which will affect the four abilities to measure the company’s financial level.Therefore,the research on share repurchase of listed companies is beneficial to corporate executives,investors have a rational understanding of share repurchase,and objective analysis of share repurchase behavior of listed companies.This paper chooses to study the share buyback event of Gree Electric Appliances from 2020 to 2021.One of the reasons is that Gree Electric Appliances is very representative.As one of the giants in the household appliance industry,gree Electric Appliances exists as a blue-chip enterprise in shenzhen market.The second reason is that Gree Electric Appliances has carried out its first share buyback since 2020,which is also representative in the market.First of all,this paper collected domestic and foreign literature on share repurchase and elaborated the concepts and theoretical basis related to share repurchase.Secondly,it selected Gree Electric Appliances as a case study,summarized the basic situation of Gree Electric Appliances and stated the buyback process of Gree Electric Appliances,analyzed the motivation of Share repurchase of Gree Electric Appliances.Then,the event study method is used to study the influence of Gree Electric Appliance share repurchase on stock price changes: the first and second share repurchase completed the purpose of raising stock price,while the third share repurchase failed to do so.By using the method of financial analysis to gree electric appliances before and after the share repurchase operation ability,debt paying ability,profitability and growth ability and industry compared with other typical enterprises,analysis the financial effect of share repurchase brings to the gree electric appliances: in general,the short-term and longterm share repurchase of gree electric appliances operation ability the positive impact is limited.However,in the unfavorable market environment of the past few years,share repurchase can maintain the stability of the company,which indicates that share repurchase can help the company’s operation and management to some extent.At the same time,the profitability of the company was improved and share repurchase did not have a negative impact on the solvency of the company,but the short-term growth capacity was not effectively improved. |
