| The 15th Congress of the Chinese Communist Party has established the setup of modern enterprise system as the direction of state-owned enterprise (SOE) reforms, emphasizing that the reforms should be devoted to the improvement of the overall economy, focus on major enterprises, allow small ones to be flexible, and implement strategic reorganization in SOEs. Following such a train of thought, reorganization in many of the SOEs is in progress, which is a critical step for SOEs to go out of the difficulty. Under such a macroeconomic situation, a massive wave of the SOE reorganization on the Stock market has taken place since 1997. By 2003, the implementation of reorganization has stepped into its 6th year. How is the performance of those on the stock market which have been reorganized?In order to find out the answer, I choose companies listed on the stock market and reorganized between 1997 and 1999, together with those reorganized for several times during the same period, as the research object. Next I use selected financial ratios to track their performance changes after reorganization. Through a comprehensive comparison, I find that the reorganization has not essentially improved the performance and boosted profitability. Then, I analyze the above conclusion from the perspectives of realistic motives, the status quo of the Chinese capital market and investment banks, and the financial integration after reorganization. At last, some thoughts and suggestions.In general, the reorganization should meet the needs of the adjustment of industry structure and industry transformation, becoming the carrier of industry integration. Companies cannot achieve consistent development only through a false account of profit. From financial point of view, in order for the reorganization to better the allocation of resources and boost profit, we still need an excellent market environment, an improved financial management system, and the cooperation of intermediary agents. |
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