Research On The Fund Source Of Midea Group Stock Repurchase And Influence On Investment Efficiency

The amendment of the《Company Law》in 2018 relaxed the restrictions on share buybacks,and the 《Opinions on Supporting Listed Companies to Repurchase Shares》 issued in the same year encouraged listed companies to implement stock repurchase,triggering a "repurchase wave" in the capital market,and stock repurchases have attracted more and more attention.However,stock repurchase needs a large amount of cash flow,and the investment activities of enterprises cannot be separated from the support of cash flow.Therefore,the source of cash flow required by stock repurchase and whether stock repurchase will affect the investment efficiency of enterprises are the focus of this paper.This paper takes the 13 stock repurchases completed by Midea Group from 2015 to 2021 as an example,combs the whole process of stock repurchases,analyzes the fund source structure of Midea Group,and finds that the operating liabilities of Midea Group account for the largest proportion.Secondly,profit accumulation;Financial liabilities and shareholders account for relatively small capital.Financial liabilities in stock repurchase of no obvious change before and after the change of equity and capital reserves more happened after the stock repurchase,launch stock repurchase does not depend on the group financial liabilities and shareholders of funds;operating liabilities and profit accumulation plays a main role,operating liabilities are mainly takes up upstream and downstream capital formation in the process of production and operation,The profit accumulation mainly comes from the operating income,and the net profit can be better converted into cash flow.It can be seen that Midea Group’s buyback funds mainly come from its own funds.Midea Group will cancel the buyback shares or implement the employee stock ownership plan and equity incentive plan to send a positive signal to the market,improve the enthusiasm of employees and promote the value of the company.As an important financial activity of enterprises,investment efficiency is the focus of enterprises.Referring to the evaluation system of investment efficiency index,this paper explores the influence of Midea Group’s share repurchase on investment efficiency from three aspects of investment opportunities,investment expenditure and investment effect.Through DEA model verification,the following conclusions are drawn:(1)Tobin’s Q value is taken as the evaluation index of investment opportunities,and it is found that the Tobin’s Q value of Midea Group shows an overall upward trend.On the whole,stock repurchase has a positive impact on investment opportunities;(2)By longitudinal comparison of the scale of long-term assets and R&D investment of Midea Group,it is found that the scale of investment expenditure generally presents a certain upward trend;(3)The return on invested capital and return on equity are selected as the evaluation indexes of investment effect,and it is found that the investment effect of Midea Group has generally shown a downward trend since the stock buyback.To sum up,stock repurchase has a certain positive effect on investment opportunities and investment expenditure,but the investment effect does not show a corresponding upward trend.