Research Of The Effects Of Stock Buybacks In Haier Smart Home Co.,Ltd.

Stock repurchases originated in the United States in the 1950 s.Due to changes in the global capital system,stock repurchases have rapidly adapted and developed internationally and have now become an important capital tool valued by listed companies around the world.The rise of stock buybacks in China has been relatively slow,and the few stock buybacks in the early years were basically to fulfill the special purpose of the company or to solve the problem of imbalance in the asset structure of state-owned companies,which was not consistent with the original purpose of stock buybacks and the laws of market economy.It was not until 2005,when China implemented the share split reform and issued the “Management Measures for the Repurchase of Public Shares by Listed Companies(for Trial Implementation)”,that domestic stock repurchases really ushered in the repurchase of shares in circulation,and on October 26,2018,the new Company Law specifically amended the relevant contents of stock repurchases of listed companies,and the first real repurchase boom emerged in Shanghai and Shenzhen.In view of this,the thesis takes the two buybacks of Haier as a case study for in-depth analysis,aiming at a more comprehensive analysis of the impact of the company’s share buybacks on the company’s finance and other aspects,and promoting the healthy development of China’s listed companies and even the capital market.The theoretical analysis of the formation mechanism of the share repurchase effect is carried out on the basis of the theories about share repurchases,and the financial and market effects of the two share repurchases of Haier are analyzed respectively.The study shows that the two stock buybacks have corresponding financial and market effects on Haier.In the analysis of financial effects,it is found that the two stock buybacks have positive effects on the company’s profitability and short-term development ability;for short-term solvency,the first stock buyback plays a negative role,while the second has the opposite effect;meanwhile,the two stock buybacks have no significant effects on the company’s long-term solvency,long-term development ability and cash flow.In the market effect analysis,the first buyback has a negative effect on short-term solvency,while the second has the opposite effect.In the market effect analysis,the first buyback has a negative effect in the short term,while the second buyback has a positive effect by significantly increasing the share price.The difference in the performance of the two buybacks is also analyzed in terms of the buyback background and the motivation of the buyback.In the case of the two buybacks of Haier,not every buyback brings positive impact on the company,and the long-term impact of stock buybacks on the company is not significant.For listed companies,stock buybacks are just a tool,not a panacea.Therefore,besides making a reasonable stock repurchase plan,fundamentally,the long-term development plan should be to continuously strengthen the level of corporate governance,improve business conditions,enhance operating performance,disclose financial statements in a timely and comprehensive manner,fully consider the long-term development of the company,enhance the long-term competitiveness of the company,and continuously improve the equity structure.