Research On Open Market Share Repurchase And The Effectiveness Of Market Value Management Of Midea Group

Since 2018,there has been a wave of share repurchase on the A-share market,which mainly aims at market value management,and has profoundly affected the future development direction of China's capital market.The effect of this wave of share repurchase on market value management will profoundly affect the choice of capital operation means by managers of listed companies in the future,the formulation of relevant regulations of regulators and the market behaviors of investors.Share repurchase is an important means of market value management and value distribution.Scholars have not reached a consensus on the effectiveness of such behavior and the mechanism of market value management.Based on the case of Midea group,this paper analyzed and summarized the effect of share repurchase and market value management.Midea group,a leading domestic home appliance company,has carried out three rounds of share repurchases totaling about 8.2 billion RMB on the open market since it went public,and has launched the fourth round of repurchase.Based on this case,this paper firstly sorted out relevant policies,literature and theories on share repurchase and market value management in China's capital market,and summarized the context and motivation of Midea group's repurchase event.Secondly,in the main part of the article,based on the market value management theory,this paper analyzed the transmission mechanism of the influence of share repurchase on market value management of Midea group.Thirdly,through the event study to Midea group all previous repurchases behavior in the short term and long term effect analysis of market value management,and use the Carhart four-factor model,calendar time and group legal empirical regression,the A-share market share repurchase in nearly five years the market value of management effect is calculated,the Midea group share repurchase the long-term value of management effect compared with the market;Finally,based on the conclusion of the study,some suggestions are put forward for the managers of listed companies,investors and regulators.In this paper,it is found that the share repurchase of Midea group has an impact on the market value management of the company through value creation,value realization and value management.In the short term,the share repurchase of Midea group can boost the share price in different degrees.In the maximum window period of 12 months,share repurchase has basically achieved the market value management effect of supporting the stock price in the long run.However,the share repurchase effect of Midea group is different from that of the whole market in different rounds.The research conclusion of this paper shows that open market share repurchase can achieve market value management effect not only in the short term through the signal transmission effect,but also in the long term through a number of ways to the operation and management of listed companies,so as to achieve long-term market value management effect,and ultimately promote the capital market value discovery and company repricing.