Research On The Motivation And Effect Of Jihong Co., Ltd.'s Share Repurchas

With the gradual relaxation of government restrictions on share repurchase,since 2019,more and more listed companies in China have begun to use their own funds to repurchase the company’s shares,which has attracted extensive attention from a large number of investors in this context.The enthusiasm of listed companies for repurchase is high,the reasons for repurchase are various,and the effects are also different.This thesis analyzes the share repurchase of case companies,it is helpful for listed companies with similar repurchase plans to learn from them and help investors better identify the advantages and disadvantages brought by various repurchase activities,reduce investment losses,and promote the construction of a more sound,just and orderly share repurchase market.This thesis takes Jihong group as the case analysis object,analyzes the motivation and effect of Jihong group to repurchase shares from a complete repurchase period,and analyzes the share repurchase behavior of Jihong group through case analysis,descriptive statistics,event research and other methods.First of all,the research background and significance of this thesis are expounded,the domestic and foreign literature review on share repurchase is sorted out,and then the research contents,ideas and methods of this thesis are expounded in detail,and the contribution of this thesis are roughly described.Secondly,this thesis introduces the concept and theoretical basis of share repurchase.Thirdly,the article explains the overview of Jihong group and the share repurchase process of Jihong group.Then,this thesis combs the announcement issued by Jihong group and the actual operation in recent years,this thesis discusses the motivation for share repurchase of Jihong group from two aspects: financial and non-financial drivers.Then,the effect of share repurchase is mainly analyzed from the two aspects of the financial effect and non-financial effect of share repurchase.Finally,Combined with the research results of the motivation and effect of the share repurchase of Jihong group,this thesis expounds the research conclusions and relevant suggestions.Through the research,it is found that there are multiple motivations for the share repurchase of Jihong group.Through this share repurchase,increase financial flexibility and reduce dividend distribution pressure.The effective market value management has improved the stock price of Jihong group and the market’s confidence in the company.After the implementation of the employee stock ownership plan,the number of the corresponding technical and management personnel has been greatly improved after the share repurchase of Jihong,achieving the motivation of employee motivation.However,it is not found that this repurchase has optimized the capital structure of Jihong group,and there is no obvious motivation to reduce the principal-agent cost.In addition,through the longitudinal comparison of Jihong group over the years and the horizontal comparison with Zitian Technology,it is found that Jihong’s share repurchase program has improved the profit index,improved the short-term operating capacity,increased the solvency,and improved the operation of the enterprise,but it has almost no positive effect on the growth of the enterprise.At the same time,Jihong’s share repurchase plan has also brought positive market impact,and the positive transmission effect on the market is the most obvious when Jihong announces the repurchase plan.Jihong’s share price has been significantly boosted,providing positive additional returns for investors.Based on the above findings,this thesis puts forward the following suggestions for Jihong group : First,pay attention to the company’s long-term operation and development ability;Second,it is necessary to rationally weigh the risks brought by share repurchases;The third is to rationally use funds from different sources for share repurchase.