A Case Study Of A State-owned Enterpriser’s Equity Contribution

At present, our national capital market is not perfect, as well as the investment of thestate-owned enterprise is apparently effected by the policy, laws or regulations. Themanagers usually think how to boost the company’s resources and advantage moreefficient and useful. They also consider how to full function in the state-owned assets.With the further research of the equity contribution theory and practice of oversea, theState Administration for Industry&Commerce issued the Administrative Measures forthe Registration of Capital Contribution Mode with the Equities on March1st,2009.Subsequently, many local Administration for Industry&Commerce issued the detailedimplementation rules of equity investment. These rules make the equity flowingbetween two state-owned enterprises become a reality. And also, the state-ownedenterprise’s investment channels are expanded. As a new kind of non-monetary way ofinvestment, equity investment not only provides a broad investment channels for thestate-owned enterprises but also strengthens the state-owned enterprise’s financingability. It will make the state-owned capital creating more social wealth.In this thesis, the theoretical analysis is the basis, the empirical case analysis is thecore. Combined with related theories with surveies, this thesis researches the practice ofthe equity capital contribution. Through analyzing the typical stock-rights contributioncase of a certain state-owned enterprise, this thesis aims to reveal the wholeimplementation process of the case and analyze the selection of the equity contributionof the state-owned enterprises, the strategic analysis in early phase of project. It alsoanalyzes the choice and evaluation method for the target company and the equity firms,and the preparatory work in the implementation process of the equity contribution. Theanalysis includes the equity valuation method, the agreement signing, capitalverification and so on. The thesis clearly shows the ways how to implement the equitycontributions in practice. It focuses on analyzing the risk of the equity contribution inthe case. The writer uses a common risk assessment method in enterprise to analyze andevaluate the equity contribution. Next, the writer introduces the conclusions of the assessment and proposes the containment for the risk. In the last, the thesis analyzes theeffect of economic benefit of the equity contribution. Meanwhile, it evaluates thesituation of the market’s development, the structural condition of property rights and themanagement status. The thesis also proposes the problems after contribution and givesthe advices. The full text has close connection with the actual case. For the enterpriseswhich wants to operate the capital with the equity contribution, especially thestate-owned enterprises, the thesis has an important value for reference and practicalguiding significance.