Problems Facing Chinese Enterprises With Their Overseas IPOs And The Solutions

During the course of a country's economic growth, the formation of capital and investment is always regarded as the most important factor. China's modernization need capital and under the favorable international capital flow circumstance, IPO(initial public offering) in foreign stock markets is a kind of important and viable method. During the past ten years, Chinese companies have experienced five waves for Overseas Listing, including manufacturing enterprises and foundational facilities enterprises and Chinese Background enterprises, hi-tech enterprises and ISP. The latest wave is monopoly enterprises from the industries of Petroleum and Telecom.The ten year overseas listing experiences involved more foreign capital and expanded financing channels. On the other hand, listing propelled reform of China's enterprises and accelerated steps of improving enterprise governance and establishment of modern enterprise system. Although the success is remarkable, the problems of high expense and shortage of refinancing capability, which due to contradiction from different aspects still need our attention. One of the environmental reasons are the shrink of international capital market, the others including the objection of domestic market, culture gap between foreign investors and our enterprises and unbalanced information distribution. While the misunderstanding of international capital market and operation result in relative low level are the internal obstacles. Under such a situation, we need to improve selection mechanism for enterprises applying for overseas listing and accelerating the progress of introducing international regulations and developing enterprises governance. For further research of the difficulties challenging China's enterprises in the course of overseas listing and the successful final solution, this article introduced and analyzed progress of CNOOC's overseas listing, from strategic reconstruction and the first round of road show, which was failed for the reason of misidentification for the company's strategy from foreign investors and went down of international security market, and the final success of CNOOC's listing in the second round. CNOOC now is work toward the goal of building the company into a international advanced energy company. From this example and research of CNOOC's management and market performance, we can easily conclude that in the developed international capital market, China's enterprises although which have 10 years listing experience, still will meet obstacles due toeconomic, geographical and culture reasons. To utilize the international capital market leading reasonable use of self-owned resources to increase the value of enterprises, the basic way is to improve operation performance of the enterprises on the basis of improving enterprise governance.