Empirical Analysis On The Performance Of The H-share Companies Before And After The Returning To A-share Market

Because high P/E ratio of A-share market, for many H-share companies are a big "temptation", combined with early A-share market system was not perfect, lead to many H-share companies catch this opportunity to return to A-shares just for financing. Review the historical process of H-share to return to A-share, have also gone through different stages according to different Government’s attitudes, which is represented by CSRC(China Securities Regulatory Commission), from encouraging regression, A-company-A-stock, regain strong recognition, wait to a strong return. Nowadays, although the government promote H-share companies come-back, with China’s securities market regulatory mechanisms and disclosure system improving step by step, returning of H-share companies are far more difficult than ever, domestic securities market is no longer just to meet these listed companies for the purposes of financing.The history of H-share companies return to A-share is more than 20 years, however these listed companies’ operating performance change with the unceasing change of policy guidance, from the first H-share company-- Tsingtao Brewery successfully comeback in 1993 to 2007,40 listed companies in total, from a year before the return to 5 years after the return, then observe the changes of operating performance of listed companies in these years. Due to the different systems of government guidance and the macroeconomic environment, and in order to enhance the comparability of the data, in this paper, according to the change of policy environment, we divide these 21 years into three comeback stages:1993-1998, 1999-2005,2006-2007 and adopt the single variable index and comprehensive index analysis method to expound the regular pattern. The single variable performance indicators which we select are ROA, ROE and Tobin Q, comprehensive index analysis using Principal Component Analysis (PCA) to evaluate each annual performance of each listed companies. Based on these two kinds of analysis, these conclusions are basically the same, namely the three stages of performance is closely related to China’s securities market and the external environment:1993-1998, the company’s performance was not improved but decreased after the return; in 1999-2005, the company performance in return was improved, although during this period had some decline, but the overall performance was improved; in 2006-2007, the influence of the subprime crisis and the economic crisis had spread to the world, the performance of these listed companies also appeared larger fluctuation, but the later results can also return to the level before the regression or even slightly higher than before.On the other hand, the return of the H-share listed companies have also brought China’s A-share market "spring breeze", the powerful economic strength and influence of these listed companies, in turn, promote the growth of the A-share market to be more mature. Of course, we still needs to innovate on the regulation of the legal, institutional rationalization and effective governance structure and other aspects, prompting the China’s securities market in the way of being more mature and effective, at last put forward some policy suggestions from these aspects.