Stock Repurchase Market Response under Performance Differences: An Event Study Based on Heng Rui Medicine and Hong Yuan Pharmaceutical

DOI

10.2991/978-2-38476-585-0_77How to use a DOI?

Keywords

Stock Repurchase; Event Study Method; Excess Returns; Signaling Effect; Heng Rui Medicine

Abstract

This paper uses the event study method to examine the market response of stock repurchase announcements on stock prices, taking Heng Rui Medicine and Hong Yuan Pharmaceutical as case studies. The event window (Day -10 to Day +10) is selected to analyze actual returns, excess returns, and cumulative excess returns, with t-tests conducted to verify the significance of differences. The results reveal the heterogeneous effects of repurchase announcements on the market. The findings show that Heng Rui Medicine, with solid fundamentals and a strong financial position, gained market recognition for its repurchase announcement in the later stages, showing a positive “value recovery” effect with a stable increase in stock prices. In contrast, Hong Yuan Pharmaceutical, facing performance pressure and lacking market trust, saw its repurchase announcement interpreted as a “market support” strategy, which triggered a negative response and led to a signal backlash, resulting in poor stock price performance. This study emphasizes that the key to whether a repurchase announcement sends a positive signal lies in the company’s fundamentals and the level of market trust, not in the announcement’s format itself. Based on this, the paper suggests that managers optimize the timing of repurchases and transparency in information disclosure, regulators enhance market regulations, and investors make rational investment decisions. The paper also points out the study’s limitations, such as the small sample size and the subjectivity in choosing the event window, and suggests that future research could extend to more industries or longer periods.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Lingxuan Guo
PY  - 2026
DA  - 2026/06/18
TI  - Stock Repurchase Market Response under Performance Differences: An Event Study Based on Heng Rui Medicine and Hong Yuan Pharmaceutical
BT  - Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025)
PB  - Atlantis Press
SP  - 679
EP  - 690
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-2-38476-585-0_77
DO  - 10.2991/978-2-38476-585-0_77
ID  - Guo2026
ER  -