The Financing Risk Assessment Study On Strategic Emerging Industry’s Listed Companies

After the era of economic crisis, fostering and developing strategic emerging industries aroundthe world are becoming important measures to seize the commanding heights of development and topromote a new round of economic growth. The development of strategic emerging industry isconducive to adjust China’s industrial structure and promote technological development and enhancethe ability of independent innovation, so as to enhance products and technologies’ internationalmarket competitiveness. As a new issue, strategic emerging industry has been lack of systematicfinancing research, so to study its financing risk is imperative.According to the forefront foreign corporate finance theory and combined with the actualsituation, this paper uses strategic emerging industry listed companies in Shenzhen Stock Exchangewhich listed before the end of the2010as research object, and describes its development andfinancing situation. According to financing risk factors of strategic emerging industry, this paperestablish a strategic emerging industry listed companies financing risk assessment system by dividingstrategic emerging industry’s financing risk assessment indicators into five categories, namely debtfinancing related indicators, equity financing related indicators, capital operation related indicators,new technologies inputs and outputs related indicators, preferential tax related indicators. Through avariety of assessment methods of the past contrast, we chose entropy analysis as the main means toassess strategic emerging industry listed companies’ financing risks.Through financing risk assessment of Shenzhen listed companies which belong to strategicemerging industry, this study found that the five largest entropy indexes are long-term capital debtratio, dividend payout ratio, R&D investment ratio, book value, cash maturing debt ratio, while theeffective income tax rate is minimum as well as the corresponding entropy equity. According to themean score of financing risks, the new generation of information technology industry andbio-pharmaceutical industry’s scores are smaller，so correspondingly, their financing risks are small,while the energy-saving environmental protection industry, new materials industry, high-endequipment industry, new energy industry get much higher scores, whose financing risks outweigh theaverage score of the strategic emerging industry. In terms of financing risks based on the size of eachsector, the main board has the biggest financing risk, GEM board’s financing risk is small, and smallplate’s financing risk is similar with the entire emerging strategic industries in Shenzhen StockExchange. Based on the financing risk score analysis of various segments of the industry, this paper putsforward two proposals based on the enterprises and the external environment policy aimed at reducingChina’s strategic emerging industry listed companies’ financing risks and to improve their businessperformance.