Study On Motivation And Performance Of Issuing Convertible Bonds After Share Repurchase Of Yahua Group

Since the 1990 s,China’s capital market has gone through the development path of spiral transmission.So far,an all-round,multi-level and three-dimensional capital market system has been established.However,with the deepening of the reform of China’s economic system,the capital market gradually develops vigorously,but it is also confronted with its due basic problems and structural problems of imbalance,imperfection and disharmony."Heavy on stocks and light on bonds" is one of them.Obviously,it is the continued popularity of this idea of economic development that brings about the problem of inefficient operation and poor structure of social capital allocation,which leads to the uncontrollable market risks and inflexible and unreasonable allocation of financial resources.The coordinated path of "share repurchase ＆ convertible bond financing" may help the regulators to clarify the idea of combining stock and debt instruments,and make use of financing tools with multiple attributes to promote the healthy and upward development of China’s capital market.Under the risk pressure of equity pledge and the call for the integration of equity and debt,article 142 of the Company Law of 2018 revised the share repurchase system,namely the new regulations on share repurchase.Unexpectedly,the new regulation included the clause that "shares can be converted into convertible bonds".As expected,the development trend of the integration of stocks and bonds has led to the issuance of new regulations on refinancing.Although this is an innovation of share repurchase and refinancing system,the ensuing insider trading,market manipulation and other problems also put pressure on the supervision.As one of the first listed companies to exchange the repurchased shares for convertible bonds,the motivation and performance of Yahua group’s behavior are worth paying attention to.Taking the refinancing behavior after share repurchase of Yahua Group as the research object,this thesis explores the motivation of refinancing after share repurchase of Yahua Group and how the refinancing behavior affects the performance by using three methods: literature research,event research and comparative analysis.First of all,the authoritative literature and cutting-edge literature are sorted out from the three aspects of share repurchase,convertible bond and issuance of convertible bond after share repurchase,the basic theory contained in the case is explained,and the "motivation-performance" earnings management path is constructed.Secondly,under the policy background of the new rules on share repurchase and refinancing,the case of convertible bonds issued by Yahua Group after repurchase is introduced,and the process of share repurchase and convertible bonds conversion of Yahua Group is sorted out.Again,to dig deeper into the innovation policy,financing needs drive,value management,control rights such as repurchase motivations,and from the market reaction and event study,research and development of financing constraints and control,investment efficiency and agency cost,operating efficiency and performance evaluation,salary incentive and the perspective of corporate governance in five further study elegance group buy back after refinancing economic consequences.Finally,for this case,relevant suggestions are put forward,such as formulating financial information disclosure criteria,giving play to the role of corporate governance mechanism,implementing executive compensation incentive plan,etc.Meanwhile,valuable enlightenment is obtained,such as optimizing the option clause design of convertible bonds,selecting the timing of compulsory redemption of convertible bonds,and improving the resolution rules of convertible bonds.