Reflections On The Real Estate Backdoor Listing

Real estate companies have historically been of concern. In recent years, China’s real estate industry has been ups and downs for several years. From wave of the listed real estate companies to the U.S. subprime mortgage crisis erupted, the financial crisis, to the building housing the Ministry of Finance and other departments jointly issued a series of policies on the macro real estate market these will push the real estate industry to the cusp. The government has combined of taxation and currency, monetary tightening, real estate companies are facing an unprecedented chain of the serious financial difficulties. The limitation of the purchase comes up one after another, leading to slower returns of real estate companies’ investment, real estate business face more difficult capital chain. In order to avoid the crisis, most real estate companies are pegged to finance in the capital market.In theory, the way to rise funds through the stock market is the ideal model of integration of enterprise and capital, and the real estate enterprises become bigger and stronger in this way. However, due to the special nature of the real estate industry, listing has always been very cautious strict by regulators. Maintaining the healthy development of real estate companies, government have to push strict approval system. In particular, the introduction of the policies in the last two years, neither backdoor listing nor IPO for the real estate industry to finance could be seen never might approved, it means financing is out of reach in the moment.In this paper, take the modern corporate finance theory as a guide to capital markets, and take the last of a successful real estate companies in the backdoor listing real estate backdoor ST KEYUAN for example. This paper is the combination of theory and practice, focused on the problems real estate in the backdoor listing such as:the choice of shell companies, corporate valuation, debt restructuring, backdoor listing methods. Besides the above issues, combining theoretical analysis and discussion for the future of real estate corporate finance increasingly difficult to find new ways of financing and for other enterprises which want to finance take for reference. The main point is as follows:The first chapter of writing this article describes the background and significance, currently the real estate business is in particularly difficult financial environment. not only macroeconomic tighten policies to prevent inflation, but also monetary policies tighten strictly. Under the comprehensive background, the special nature of the industry is facing more stringent state regulation and control policies. However, the real estate industry related to people’s livelihood and national stability, and it is the top priority of the national economy. Despite the difficultly complex economic background, estate companies can pass the test of this special period and avoid bankruptcy, and how to find an effective means of financing in the current economic environment, making the healthy and stable development which are particularly meaningful.According to the second chapter in ST KEYUAN backdoor case involving the issue of shares to asset replacement and purchase of assets leads to backdoor listing features of the part involved in the listing of Theory: The theory of asset restructuring as described in the Description of the backdoor listing of definitions and a common way to backdoor listing, asset restructuring and other theories of the way; asset restructuring of asset valuation methods and the applicability of theoretical introduction and notes, laying the groundwork for the case described further below.In the third chapter is backdoor listing in case, the main parties are basic situation of these companies containing the financial situation of the corporate management, and this make readers understand the paper at a glance and grasp the whole backdoor listing through the backdoor of the parties and in general.The fourth chapter is the focus of this article. It’s about the special financial issues in this case involved in refining in-depth analysis. The greatest feature of this case lies in three points:1, the ZHDC real estate company is a successful real estate sector last backdoor listing of the company; 2, in ZHDC backdoor way of choice real estate asset replacement and purchase of issued shares, the prescription involved in backdoor Hong real estate and they have a common backdoor party control of ST KEYUAN and ZHONGHONG industry body; 3, this company experienced twice approval before the Commission adopted backdoor listing, the biggest difference between the two reporting programs is Business Valuation differences, the SFC in ZHDC real estate backdoor on the main concerns is that these valuation differences; for these specific issues, combined with theoretical analysis for further discussion. Finally, Chapter V, the conclusions of this chapter is mainly a summary of the preceding chapters, summed up three opionts:1, real estate companies which want to develop quickly how to finance; 2, selecting the effective, fast and lowest cost way to backdoor Listed in the way in capital market companies should focus on such as stripping the shell company’s debt in what way stripping in order to make more effective backdoor; 3, business valuation in the attention to the selection of valuation methods that draw the correct valuation.The main contribution of this paper: the vivid case will be listed on the characteristics and the use of backdoor. Backdoor listing by the attention to the problems presented, proposed solution, a poor environment in the future under the conditions of the financing, real estate corporate finance information.Lack of papers:the limited capacity due to time and research, the study is not enough theoretical depth and height of the inevitable; addition, this article uses a case study, based on the main line to start the specific case described, including aspects of the case described is not one by one; and specific cases is difficult for general guidance.