Research On The Effect Of Suofeiya Home Collection Co.,Ltd.'s Stock Repurchase

In recent years,China's domestic listed companies have gradually attached importance to the capital repurchase mode of operation.At the same time,the state has continuously improved relevant laws and regulations,which has provided greater support and convenience for China's listed companies to implement stock repurchases.In 2018,the domestic A-shares set off a stock repurchase boom,and the total amount of repurchases implemented during the year amounted to RMB 61.702 billion.As domestic stock repurchase cases increase,domestic scholars' theoretical research on stock repurchase is constantly deepening.Case studies on the effects of stock repurchases of listed companies in China can not only enrich the relevant theories of domestic stock repurchases,but also provide more targeted assistance for the implementation of future stock repurchases by domestic listed companies.This article takes the stock repurchase event of Suofeiya Home Collection Co.,Ltd.as a case study object.Based on signal transmission theory,principal-agent theory,and financial effect theory,this article uses case study method,literature study method,event study method and other methods to carry out in-depth research on this stock repurchase.First,according to the specific situation of Suofeiya Company,this article uses comparative analysis and financial index analysis to analyze the motivation of the stock repurchase,and finds that the motivation of the stock repurchase event is to stabilize the downward stock price,optimize the capital structure,and replace cash dividend.Then,this paper studies the effect of Suofeiya's stock repurchase from three aspects:market effect,financial effect and non-financial effect.After research,it was found that the stock repurchase helps to increase the company's earnings per share,optimize the company's capital structure,increase shareholder wealth,and increase the company's equity concentration.However,the market effect caused by the stock repurchase is not positive,and it has a certain degree of negative impact on the company's strategic development.According to the analysis of the Suofeiya's stock repurchase effect,the author found that the stock repurchase event has two major problems:the downward trend of the stock price has not been alleviated and the company's cash flow is in short supply.The main reasons for the problems are:the poor timing of stock repurchase implementation,the small size of the stock repurchase funds,and stock repurchase funds from a single source.Finally,this article puts forward three suggestions for the problems in this stock repurchase:find the right time to repurchase again,increase the number of repurchase reasonably,and enrich the source of repurchase funds.At the same time,I hope this article can provide help for domestic listed companies to carry out stock repurchases in the future.