Analysis On The Motivation And Effect Of Stock Repurchase Of Beijing Shengtong Printing Co.,Ltd

Stock repurchase is a kind of behavior which a listed company to repurchase its outstanding shares from the capital market,and it is a common method for companies to manage the market value.Compared with foreign countries,the start of stock repurchase in China is late,and the number of companies engaged in stock repurchase in the initial stage is relatively small.Until 2018,the revised new Company Law further improves the relevant contents,policies and regulations of share repurchase,and encourages companies to implement stock repurchase.As a result,Chinese stock repurchase is at its peak,and more and more companies regard share repurchase as a way of capital operation.This article selected Shengtong as the research of stock repurchase cases.By using literature research method,case study method,and event study method,this paper makes an in-depth study on the motivation of the two stock repurchase of Shengtong in 2018 and 2020,as well as the market and financial effects brought by the repurchase,in order to provide relevant theoretical basis for more companies that are carrying out or will carry out stock repurchase in the future.This paper firstly reviews the domestic and foreign literature on the motivation and effect of stock repurchase,and then briefly summarizes the relevant concepts and theoretical basis of stock repurchase,and then makes a case study of Shengtong,after a brief introduction of the basic situation of the stock repurchase company,it reviews the implementation process of the two stock repurchases of Shengtong,focuses on the analysis of the reasons for the implementation of the stock repurchases of Shengtong and the market and financial effects caused by the two stock repurchases.Specifically,this paper uses the event study method CAR and BHAR to analyze the short-term and long-term market effects of the two stock repurchases,and also uses the financial risk warning model and factor analysis method to study the financial effects of the two stock repurchases.It is found that the two share repurchases of Shengtong can deliver short-term positive signals to the market,but the effect is not long,and the long-term stability effect on the stock price is not obvious.From the perspective of financial risk,the financial risk of Shengtong increased before the first stock repurchase,and the stock repurchase was conducive to the financial risk mitigation of Shengtong,but the mitigation effect lasted for a short time.The second stock repurchase failed to reduce the company’s financial risk.From the perspective of operating performance,the first stock repurchase of Shengtong did not significantly improve its operating performance,but the second stock repurchase has a positive effect on improving its operating performance.Finally,this paper gives some suggestions for listed companies,investors and government departments,hoping to provide reference for Chinese stock buyback practice.