Research On The Causes And Effects Of Shuangta Food's Share Repurchase And Repurchase Use Change

Share repurchase has matured in the capital markets of western developed countries,but it is still in the development stage in our country.Initially,the shares repurchased by China's listed companies can only be used to reduce registered capital or merge with other companies.With the introduction of relevant regulations in 2005 and the development of the capital market,the use of share repurchase has increased,repurchase activities have become increasingly frequent,and the number of shares repurchased and the amount of transactions have shown an increasing trend.In 2019,there are 965 companies that have implemented share repurchase of A shares,with a total repurchase of approximately 102.281 billion yuan.Shuangta Food belongs to the food manufacturing industry.In 2018,it spent more than 90 million yuan to repurchase 20 million shares,and the repurchase ratio reached 1.58%.This article adopts a case study method,taking Shuangta Food's share repurchase incident as the research object,and analyzes the motivations and effects of its share repurchase and changing the use of repurchase.First,this article sorts out relevant literature on domestic and foreign share repurchases and introduces the institutional background and basic theory of share repurchases.Second,it analyzes the motivations of Shuangta Foods to conduct share repurchase and change the use of repurchase in combination with the company's actual situation.Then,the event research method is used to analyze the market effects of declared repurchase and change of use.Then it analyzes the financial and non-financial effects of the company from three aspects: financial capacity indicators,economic value added and non-financial indicators.Finally,this article draws conclusions from the case analysis and proposes countermeasures.Through research,it was found that the motivation for the share repurchase of Shuangta Foods was the implementation of equity incentives or employee shareholding plans,the reduction of free cash flow,and the replacement of dividend policies for cash dividends.The motivation for changing the purpose of the repurchase was to signal that the stock price was undervalued and stable the company's stock price and increase earnings per share.After Shuangta Food announced the share repurchase and announced the change of the repurcha se purpose,the stock price showed an upward trend,indicating that a positive market response had occurred,but the market response to the announced share repurchase was short-term.From the perspective of financial effects,the implementation of share repurchases has negatively affected the company's investment and financing activities and reduced the company's ability to pay debts.However,the company's financial effects have a positive response after the cancellation of shares,and its earnings per share and earnings capabilities,development capabilities,operational capabilities and economic value added have all improved.From the analysis of non-financial indicators,it was found that changing the use of repurchase does not have a negative impact on the company's reputation and brand influence,but it has discouraged highly educated talents and core employees.Finally,this article puts forward some countermeasures and suggestions.For the company itself and other companies that want to repurchase,one is to use multiple payment methods for repurchase,the other is to protect the interests of creditors,the third is to perform share repurchase when the stock price is undervalued,and the fourth is to weigh the advantages and disadvantages and make a careful decision to change the use of repurchases.For government regulators,the first is to improve the information disclosure system to prevent insider trading,and the second is to resolutely crack down on malicious stock repurchases.