The Performance Of Listed Companies, The Split Share Structure Reform

Originated from the early 1990s, the share-split once played some positive role in resolving the capital shortage problem of state-owned enterprises. However coupled with some strategic and structural problem of our capital market, the share-split has made the market lost with many necessary functions and hampered the sustained and stable development of it seriously. Since the mid of 1990s, our government has come up with many solutions successively, all of which failed finally as a result of violation of market law.Thus the share-split reform was finally started from the May of 2005 and almost finished. And till now, the stock market performance has gone through non-comparable improvement, which shows that share-split reform has brought about much efficiency and effect to the market. However when stock market performance improved, does it, at the same time ,mean the improvement of financial performance of listed companies as well? This is what the paper will focus on.The share-split reform is aiming at optimizing the ownership structure after the complete trade of stocks, thus improving Corporate governance structure and promoting the financial performance. The representative theories of share-split reform are property right theory ,entrust-proxy theory, control-right theory and fluidity theory. There are also a lot of demonstration research focusing on the relationship between ownership structure and financial performance.By method of theory research and demonstration research, this paper will analyze the effect of share-split reform on financial performance in the past three years and also the relationship between the ownership structure and financial performance as a result of the reform. The research shows, in general, the reform has optimized the ownership structure and improved the financial performance of listed companies accordingly. However, the optimization of ownership structure doesn't mean subsequent improvement of financial performance definitely as the improvement should also be incorporated with a series of supportive measures. Considering this, in the last chapter the author has also raised some policy suggestions.