Operating Performance Study Of Dual Listing Companies

Dual listing is referring to the behavior that the same company listed separately at two different stock exchanges. With the speed up of the global economy integration process, the number of the listed companies taking a chance to get a dual listing at international capital markets is also growing. August 27, 1993, Tsingtao Brewery (H shares) becomes the first Chinese dual listing company which returns to the Shanghai Stock Exchange issued A shares and listed, followed by more and more Chinese companies come back and finance on the A-share market after issuing H shares.Dual-listing approach of Chinese companies has great difference with other countries. It follows the listing mode that "go out" to the outside market, and then "come back" to the domestic market. Moreover, Chinese stock markets are significantly different from western stock markets which are well-developed. At Chinese stock market, there is a dual that the emerging market roots in Chinese transition economy. This characteristic determines that differences exist between the external factors which impact Chinese listed companies and that impact Western countries. Therefore, studying the motivation problem of Chinese dual listing, it is necessary to analyze the special environment which Chinese listed companies are in. At the same time, on the Chinese dual listing motivation, if there is a decline of performance after the dual listing should be concerned. It provides a scientific basis for the argument that if dual listing of Chinese companies' return is for the purpose of "enclosure of money", and also makes the financing decision-making of dual listing companies and the policy decision-making of the security regulatory department to be foundational.First of all, systematic review, organization and summaries on relevant literature about dual listing are put forward by this article, and research ideas are proposed; Secondly, on the basis of introducing the system background of dual listing of Chinese companies, this article analyzes the motivation of China promoting dual listing and the motivation of companies choosing dual listing, and then discusses changes in operating performance after dual listing from the perspective of dual listed companies' financing motivations; Finally, with fully recognition of the premise research and study, a further research is taken on the long-term market performance after dual listing. Based on 56 dual listing companies as samples, this article makes a scientific research evaluation through utilizing majority information about changes in operating performance before and after the listing , by making use of principal component analysis, with general utilization of eight financial indicators which are the total assets yields, return on equity, current ratio, asset-liability ratio, total asset turnover ratio, the mobile asset turnover, total assets growth, profit growth rate. The study found that, there is a significant drop in the overall operating performance after issuing new shares or additional shares.