Analysis On Motivation And Financial Effect Of Yili Group's Share Repurchase

In the 1950 s,share buybacks began to attract the attention of researchers and began to prevail in the mid to late 1980 s.With the promulgation of the 10b-18 law,share repurchases began to be sought after by major companies in the U.S.capital market.On October 19,1987,the New York stock market plunged and investors madly dumped stocks.In order to prevent the stock price from falling and stabilizing the stock market,more than 600 listed companies have chosen to repurchase company stocks in order to increase investor confidence.Share repurchasing has become a kind of regulation and control method commonly used by companies in the mature stock market,and is even known as the “rescue artifact”.The development of China's stock market is relatively late.Early share repurchases are generally used as a means of split share reform.There have been several cases of share repurchases in China's capital market before 1999,but they were all aimed at the repurchase of state-owned shares to resolve the issue of different rights of the same shares,and at that time our country's “Company Law” restricted share repurchases.Quite a lot,share buybacks are not much attractive to listed companies.With the globalization of the economy,China's stock market has gradually been brought into line with international standards.Previous laws and regulations have been unable to meet the economic development.In 2005,the government promulgated the “Measures for the Management of Listed Companies Repurchasing Social Public Shares(Trial)” to relax the share repurchase.With restrictions,listed companies can buy back tradable shares,and more and more listed companies use stock repurchase to adjust their capital structure,releasing investors with a good signal of future development prospects and raising stock prices.However,the motives and effects of the company's share repurchase in different stages of development are not the same.Therefore,it is of great academic and practical significance to study and analyze the motivation and financial effects of the repurchase of listed company shares.This article mainly adopts the literature review and case study analysis ideas,and conducts literature review from three aspects: research on share repurchase behavior,research on the economic consequences of share repurchase,and research on the relationship between share repurchases and financial effects.After that,the relevant concepts and theoretical foundations are summarized.According to the way of repurchasing,repurchasing is divided into four major categories,which lists the various motivations for share repurchases and puts forward specific measures for financial effects.In the second half of 2015,China's stock market suffered a serious stock market crash.The stock price dropped sharply.The China Securities Regulatory Commission actively implemented measures to rescue the market.Each listed company also responded.Among them,share repurchasing is one of the important measures.Yili Group also issued a share repurchase.announcement.After many years of continuous development,Yili Group has become the leading enterprise in China's dairy industry.In the 2017 “Global Top 20 Dairy Companies”,the Group ranked among the top 8 in the global dairy industry,and ranked first in Asia.It has been ranked in the top ten global dairy industry for four consecutive times.The company has a strong internship in the dairy industry.Therefore,this paper selects Yili Group as a case for analysis and has strong representativeness.Taking the repurchase actions made by Erie Group Co.,Ltd.in 2015 as the background,combined with the overall environment of the stock market and the theoretical basis of share repurchases,the motives for the repurchase of Eli Group's shares are analyzed from various aspects,and from the company's value and financial performance.The detailed analysis of the financial effects of repurchasing using multiple specific measurement indicators in three aspects of the capital structure and the conclusion that the share repurchase plays a certain role in upgrading the stock price of Yili Group in a short period of time and the production and operation of the company And the financial situation played a certain positive role.Finally,based on the results of the case study,some problems in China's stock repurchase at the current stage are put forward,and some targeted suggestions and prospects for the future of share repurchases are put forward.