Research On Corporate SEO And Performance In China Listed Company

After the companies’initial public offerings, as their business expands, in order to keep lasting development, the enterprises need to make second equity offerings to deal with the capital bottleneck. The security market of China keeps rapid development since the1990s when China’s capital market established. Since then, the financing and refinancing problem has always been a hot social concern. In China, the ways public companies can choose to make SEO went through a single way to diversity, and the scale of SEO is expanding. But as the security market develops, many problems exposed in the course of SEO:the SEO structure is always unreasonable, companies change the use of second equity offerings funds, some companies intend to make a quick bulk by SEO. To solve these problems, we must research China’s second equity offerings revolution and the influence of second equity offerings to the companies’ performance.This paper reviewed some relevant literature and materials, and combines theory research and case study. It analyzes relevant theories, and makes a systematic review of China’s SEO rules’revolution. Then it thinks the rules of China’s SEO is perfecting and relaxing. This paper studies the situation of China’s SEO. According to the statistics of the China securities regulatory commission, China’s security market accumulated financing reached6.36trillion yuan since it established, and SEO accounted for33.55%. Thus second equity offerings play an important role in the security market. This paper analyzes the situation of China’s SEO market, and summaries some characteristics of China’s SEO:the scale of SEO is expanding, additional equity offerings take the main place in all the SEO ways, companies always choose the way that the government advocated. Then it studies the case of GD POWER DEVELOPMENT CO., LTD, and analyses the influence of refinancing to its performance. Finally, this paper summaries some enlightenment of this case. The paper thinks that the refinancing policy change affected the case company’s choice of the way to refinance. Share allotment, additional equity offer, and convertible bonds issued makes different influence to the case company’s long-term financial performance, the market performance and the capital structure. Additional equity offer is better for the development of the company’s performance. The uses of the refinancing funds can influent the company’s growth ability. Companies should invest the capital in the project of sustainable profitability.