Research On The Motivation And Financial Effect Of Stock Repurchase In Shaanxi Coal Industry

Stock repurchase originated in the United States.With the development of western capital market,stock repurchase has gradually become a mature capital operation tool in the West.However,due to the late start of China’s capital market,the development process of stock repurchase in China is relatively short.In the 1990 s,with the promotion of split share structure reform and the continuous improvement of China’s legal system,the situation of stock repurchase in China is more and more.Recently,the stock market has been hit hard in 2015 and 2018.In order to stabilize stock prices and maintain market value,many companies choose stock repurchases.Especially in 2018,the stock buyback has an unprecedented explosive growth,both the number of buybacks and the amount of buybacks have reached a new high over the years.With the improvement of China’s economic system reform,the government’s attitude towards stock buyback has changed from strict control to strong support.In recent years,the relevant laws to improve stock buyback have been constantly introduced.Past research results can no longer meet the needs of the current market,so stock repurchase research with more theoretical and practical significance is imminent.In this paper,the common case study method is used,and the literature research method,event research method and financial comparative analysis method are used to analyze and study the motivation and effect of stock repurchase in Shaanxi coal industry.At the beginning,it starts from the research background,and expounds the research significance and overall understanding of stock repurchase at home and abroad.Through the analysis and integration of international theories,it lays a good theoretical basis and authoritative basis for the study of the text.After that,the paper introduces the current situation of Shaanxi coal industry in recent years,the background of buyback and the course of stock buyback.Then Shaanxi coal industry as a case company to conduct a separate in-depth analysis,first to explore the fundamental motivation and factors of its stock buyback,compared with the current mature motivation hypothesis theory,analysis and comparison.On the other hand,the research of financial effect should not only startfrom the impact of financial performance,but also need to deeply analyze the impact of market value.Finally,the paper makes an in-depth analysis and comprehensive summary,taking Shaanxi coal industry as an example,to provide valuable stock repurchase enlightenment for other listed companies.In the case study of Shaanxi coal industry stock repurchase,it is found that the main causes of Shaanxi coal industry stock repurchase mainly include: the stock price is seriously undervalued,using stock repurchase instead of dividend distribution,reducing agency costs,and policy promotion.Through the analysis of financial effect,the stock repurchase of Shaanxi coal industry has passed a positive excess cumulative rate of return,and the enterprise value has been improved.However,the financial effect of the Shaanxi coal stock repurchase is not obvious,the solvency and operating capacity have improved,and the profitability and growth capacity have declined.