Study On The Influence Of Directional Add-issuance On The Value Of The Listed Companies

Since the carrying out of the Issuance of Securities by Listed Companies Management Approach" in2006, directional add-issuance have gradually replaced the public issuance of equity refinancing, and become the mainstream way. Relative to the public issuance of new shares,which have stringent performance requirements, the directional add-issuance is less demanding. It has no regulation on profit. The distribution cost is only half of the public offering. The regulatory review process is relatively simple. Even deficit enterprises can apply for the issue, which is good financing opportunities for the listed companies facing fine investment chances. Directional add-issuance is also good for the companies to attract strategic investors and institutional investors, improve management, inject high quality assets, avoid related transactions between big shareholders and the listed companis, avoid competition in the same industry,and then improve the quality and profit of the companies. The object of directional add-issuance is the company’s main shareholders, institutional investors and individual investors who have massive financial strength and strong tolerance to risk, not including small shareholders,thus helping the listed companies to get rid of the concern of "raising money ", which is helpful to boost market confidence. However, due to the backward supervision methods, in the process of directional add-issuance,there are severe insider tradings which damage the interests of creditors and ordinary investors. For exemple,the controlling shareholders inject inferior assets to the listed companies for transfer of benefits. In this case, the stock price can not reflect the true value of the company,but financial index is able to evaluate the influence of directional add-issuance on the company objectively.In this paper, on the basis of fundamental theory and related articles about directional add-issuance,using the methods of financial analysis,I analyse the financial statements of Hisense Electrical Co. Ltd before and after the directional add-issuance in2009,and discuss the impact of directional add-issuance on the company’s ability to operate,pay debts, make profit and develop.First,using the method of comparative analysis between two related comparable economic indicators of the company itself,make longitudinal comparison before and after the directional add-issuance. Then make ratio analysis and horizontal comparison with other advanced enterprises. Finally, study the changes of major shareholders,objects of the issuance and other investors’ benefits after the directional add-issuance,and analyse the impact it make to above interest parties.