Study On The Motivation And Effect Of Stock Repurchase In Red Star Macalline

Stock repurchase first appeared in the United States,now has been widely used in the western capital market,The development of China’s capital market is not as mature as the West,stock repurchase started late,the development is relatively slow,in 2005 the CSRC promulgated the stock repurchase-related management measures,stock repurchase is gradually known and applied by domestic listed companies.In 2018,the amount of buybacks of A-share listed companies recorded a record increase,and the H-share market also entered a buyback boom,with the number of companies implementing share buybacks for the year reaching a record high since 1991.Compared with the maturity and marketization of the H-share stock repurchase market,the A-share stock repurchase market is still in the development stage,in-depth analysis of the listed company’s stock repurchase motivation and the resulting effect is conducive to deepening the management of listed companies and investors on the effectiveness of stock repurchase,At the same time,China’s securities regulatory authorities to constantly improve the stock repurchase related policies and laws and regulations to provide more ideas and perspectives,and further standardize the stock repurchase behavior of listed companies,for the sustained and healthy development of China’s capital market has a positive significance.This article selects the Red Star Macalline,which is listed on both A-share and H-share,as the research object.The company is the first A-share listed company to repurchase shares by offer.In response to its H share offer repurchase event in 2018,based on the signal transmission theory,principal-agent theory and financial effect theory,using literature research,case study and event research to analyze the motivations of its stock repurchases from three aspects: corporate value drivers,corporate financial drivers and other drivers.Then,analyzing the market effects,financial effects and other factors that repurchase behaviors have on companies effects,the conclusion is drawn from the conclusion of the study,and the targeted suggestions are put forward from the policy level and the company level.This paper finds that the motivation of Red Star Macalline’s stock repurchase is not only to raise the share price,increase the earnings per share,and provide exit opportunities for H-share shareholders mentioned in the announcement,but also to improve the efficiency of the use of funds,instead of cash dividends and stock price’s difference between A shares and H shares and other hidden motives.Red Star Macalline’s repurchase of H-share has generally reached the goal of share repurchase,stabilizing the company’s share price in the short term,giving the company a positive impact on its financial performance,promoting the company’s strategy and increasing the investment benefits of small and medium-sized shareholders;but at the same time,stock repurchase increases the company’s financial risk,and the “Domination of a Single Shareholder” phenomenon is more obvious.In view of the conclusion of the study,at the policy level,the construction of the stock repurchase system should be promoted,laws and regulations should be improved,the supervision of the stock repurchase market should be strengthened,and information disclosure should be regulated.And take measures in advance to resist possible financial risks,but also pay more attention to the impact of repurchases on minority shareholders.