Listed Companies In China Public Offering And Financial Impact Analysis

A series of new rules and measures of refinancing and new shares listed on market were introduced by CSRC (China Securities Regulatory Commission) in 2006. This indicates that Chinese capital market has entered into a new era of full circulation of shares. As the first step of refinancing between the old and new separation, non-public (also called private) offering is open a new channel for the listed company on financing.With An-gang Shares became the first listed company of non-public offering since February 2006, non-public offering which learned the experiences from the oversea and intruding a new financing issuing policy with the background of full circulating, became used more and more by the listed company. As the non-public offering has the advantages of simply procedure, low cost and easy approval by the relative authorities compared with the public offering, the way of refinancing method are popular in the listed company. A few listed companies have changed their former plan to select private offering simply and easily. By the end of 2006, 94.975 billion RMB had been collected, which is in the percentage of 90.48% of the total new collection fund. And 8.34% of the total share refinancing funds. According to the statistics of WIND financial terminal, 146 listed companies in Shanghai and Shenzhen Stock Exchanges have been approved by CSRC to implement the non-public offering up till September 29th 2007, and over total 20 million RMB were collected. Now, non-public offering has become the main refinancing method of Chinese listed company.Easily get approved for the non-public offering is one of the main reasons to be chased by the listed company. The CSRC also didn't give a clear financial restriction for it as the other refinancing. With the same time, we found the non-public offering didn't always encounter the"green light"as expected. There are 50 listed companies implemented non-public offering in 2006, in which 18 were rejected by the CSRC, 11 were reviewed again after revised their options, rest 7 companies were still rejected by CSRC after several times amendment for their options. Whether it was because of financial factors, or there are no financial restrictions for non-public offering? Or there are no achievements for the successfully listed company of non-public offering?Based on the above-mentioned queries, the article tried to research the non-public offering from the view of financial. The article has analyzed the status of refinancing and issues of non-public offering based on the present situation, analyzed the relevant financial issues of non-public offering based on achievements and drew conclusions and made recommendations. The article is divided into five chapters:Chapter I: PrefaceThis chapter mainly describes the research background, purpose, current situation and research methods.ChapterⅡ: The overview of non-public offering of Chinese listed company.This chapter starts from equity refinancing of the listed companies, which including: Right issuing, Public Offering, Convertible Bonds, Non-public Offering, simultaneously conditions and policy involvement of non-public offering. Based on Asymmetric Information, the Window of Opportunity hypothesis and Circulating Cost theory, the author explained the non-public offering, and described five main modes of non-public offering.ChapterⅢ: Analysis on financial restriction factors of non-public offering of listed company by CSRC.This chapter researched the factor of financial restriction facts of non-public offering from the view of CSRC. 50 of non-public offering companies and 7 denied companies were selected by the WIND database as the sample. The author also selects 15 representative financial indexes based on repay ability, operating capacity, profitability and development ability and set-up LOGISTIC by selecting 6 main ingredients. This research reveals that the CSRC have financial requirements in non-public offering, but they didn't have specific financial constraints. ChapterⅣ: The empirical analysis on non-public offering to the influence of companies'financial performance.This part focuses on the examination of non-public offering refinancing to the public offering companies'performance. We take a sample of 20 companies listed either at Shenzhen or Shanghai stock market which runs non-public offering and finance before September 27th 2007, refer to the quantitative analysis indexes, make analysis on principle components and constructed integrated performance function based on the above indexes, Wilcoxon signed-rank test showed there was no significant growth of corporate performance by non-public offering which has been proved to be a method encircles the money in disguised form. It is contrary to that declared in the non-public offering scheme and the CSRC's intention that it will provide opportunities for low finance performance corporations.ChapterⅤ: Conclusions and Suggestions.This chapter draws the major conclusions about non-public offering influence to listed companies'finance, and provided suggestions as follows on how to complement refinance especially to non-public offering at the background of entire circulation.Based on the existing research, the author has tried to make the following innovations:First, the non- public offering refinancing has got the attention since it was issued since 2006.Current research of non-public offering is targeted at the issue of motivation, fair pricing, the main mode and regulatory measures. Based on the empirical analysis of financial issues, the author try to prove whether the non-public offering will truly improve the financial performance of listed companies or not.Second, the author applies methods of theoretic analysis and empirical analysis, comparative analysis and statistical examination to deeply explain the problems of the non-public offering.Third, the author constructed integrated finance performance function of the non-public offering, which drew conclusion that it did not bring out significant financial increases. The article put forward that CSRC should audit non-public offering strictly, limit finance by strict financial indexes and strengthen non-public offering supervision.The deficiencies of this article are as follows:First, the author selected data from the CSMAR database, CNINF database, WIND database and GW securities information platform. The accuracy of the data has not been checked.Second, regarding the financial performance of non-public offering companies, due to the limitations of data, the author can only select semi-annual data, which affected persuasive of the conclusions.