Project Financing Private Placement For The Long-term Effects Of The Listed Companies’ Financial Performance

Since China Securities Regulatory Commission promulgated the "Administrative Measures for Listed Companies’Stock Issuance"(short for Administrative Measures) on May8,2006, the refinancing means of stock market had great changes."Administrative Measures" has only made regulations to the conditions of private placement (non-public offering), compared with other refinancing means, private placement has following advantages:lower threshold, flexibility pricing, private placement can help some group companies to achieve overall listing by injecting quality assets of listed companies. So private placement have become the most popular refinancing means of stock market.From2006to2007, stock market implemented a total of223times refinancing, the total amount totaled367.814billion, including a total of182times private placement, the amount totaled294.994billion.Therefore,private placement exceeded other refinancing means both in the amount and the scale.In order to further standardize the order of the securities market, China Securities Regulatory Commission promulgated " Operation Standards for Listed Companies Non-public Offering"(short for Operation Standards) on September17,2007, it clearly rules the principles of private placement, issue objects and subscription terms, the approval and issue of new shares, and so on. Thus, after the "Operation Standards" implemented, the development of private placement still grew dramatically. From2008to2011, private placement has implemented102times,112times,153times,190times, during which the refinancing of stock market is144times,136times,183times,604times. Thus, the implement of "Operation Standards" has not restrained the surge of private placement. On the contrary, its great amounts in refinancing is increasing every year.Academic research about private placement has become rich. Recent studies on private placement mainly focus on the announcement effect, pricing research, private placement and large shareholders’wealth transfer, the effect of private placement to the companies’ short term operating performance, and so on. Foreign representative as follows:Masulis, Korwar study of the listed companies’ excess return after implementing private placement with comparison analysis, results show that the company issuing new shares have a negative average total return. Lougran, Ritter study private placement companies’ profit changes before and after issuing, and find samples have a rising profits phenomenon before issuing new shares but have a falling profits phenomenon after issuing. Mclaughlin study of companies issuing new shares and their financial performance in the view of information asymmetry, through the longitudinal comparison and horizontal comparison, the conclusion shows that samples issuing new shares will have a downturn financial performance after issuing, and so on. Domestic representative as follows:Huang Huaji, Chen Ligui give private placement companies’ financial performance a score using factor analysis, to gauge companies’ performance three years after implementing private placement, research results indicate that private placement really help promote companies’ long-term performance. Li Ju ranks companies’ financial performance before and after private placement by a year, through the comparison of average ranking, finds private placement promote companies’ financial performance to a certain extent. Zhang Weidong, Li Haichuan study short-term announcement effects and long-term financial performance of assets injection type private placement, the results find that private placement have a positive short-term announcement, and private placement’s long-term financial performance have relation with the type of injected assets. Guo Lanying, Ji Leilei, Hou Zengjie use whole appearing on the market type private placement listed companies as samples, find that private placement improve listed companies’ financial performance, and after the companies whole appear on the market, their financial performance keep a stable growth.Now scholars have not made any specific research about project financing private placement, and the research about the longterm effect of private placement to companies’ finance performance is small. Therefore, it is theoretical and practical to do research on longterm effect of project financing private placement to the companies’ finance performance.First, this paper anatomized the relevance theories and concepts of private placement, including private placement theory, financial performance concept, private placement condition, private placement principle, private placement procedure, private placement feature, the purpose of the funds raised, private placement object, and so on. This paper chooses253listed companies which has made private placement during2006-2008in A share market as total sample, through the manual collect material, author selects181listed companies which purposed project financing private placement as the preliminary study sample, then selects123listed companies which financing project completed before2010as the final study sample. The author selects the industry return on equity after adjustment as the explained variable, and selects five control variables, set apart the first big shareholder, issued ratio, financial leverage, company size, TobinQ, and selects four explanatory variables, set apart the use of raising funds, business structure, issued object, related transaction, then sets up the plural linear regression model and tests the data of samples. The author observes project financing private placement’s financial performance, which financing projects have finished three years, and observes the influence of raising funds used for project financing ratio, the original business structure whether change, institutional investors subscribe for news shares, issuing before if an related transaction to companies’ financial performance. In the empirical conclusions and policy recommendations section, the author analyzes the impact of research conclusion reasons, and puts forward some policy advice to regulators. The frame as follows:The first chapter, introduction. First, this paper puts forward the research background and research significance, domestic and foreign situation in this domain. Then, put forward thinking and methods. Finally, put forward the innovation and the insufficiency of this paper.The second chapter, the related theory of private placement. First, introduce the related theory of private placement and the concept of financial performance. Then, summarize the principle, condition, procedure, characteristic of the private placement. Finally, respectively introduce the object of private placement and the use of raising funds, and the possibility they may impact companies’financial performance.The third chapter, empirical study. First, this paper puts forward the research hypotheses. Then, confirm data sources and select study samples. Third, build regression model after variables selected. Finally, obtain regression results after describing variables and analyzing the regression.The fourth chapter, conclusions and policy recommendations. According to the results of the empirical study obtained this research conclusion, put forward the author’s opinion on the conclusion.The fifth chapter, follow-up research forecast. In allusion to the research insufficiency and blank, made clear the future research direction in this field.Through theoretical analysis and empirical analysis, author draws the following conclusions:(1) Through univariate analysis found that companies’ financial performance descends year by year after project financing private placement completed projects three years, and its financial performance is worse than private placement before;(2) The more listed companies put raising funds into project construction, the better its financial performance after projects completed, and the performance is significant in the third year of completion;(3) In the long run, financing projects changed the companies’ original business structure could promote its financial performance significantly;(4) Made private placement absolutely towards institutional investors will improve companies’financial performance continuously after financing projects completed;(5) Related transactions happened before listed companies’private placement will not influence financing projects’completed financial performance significantly.Project financing private placement as research object is the innovation of the paper. Author observes companies’financing performance three years after completed projects. The features of the paper is fixed deadline, but not fixed years. Because of limited years and limited samples, there is not enough data for the empirical study of financing performance, this is the deficiency of the paper. In addtion, to expand the samples, the paper regards December31,2008financing project completion degree to85%of samples as completed, this may produce errors to research results.