An Empirical Analysis Of Private Equity Investment’s Impact On The Company’s Profitability And Growth

Gradually along with the perfect of our country’s multi-level capital market system, especially the gradually matural and popular new three board,the upcoming registration system,raise the proportion of direct financing for private equity investment, promote the development of small and medium-sized enterprises increasingly highlight the role of, mainly displays in: to solve the company’s financial difficulties, as investors took advantage of its own resources to the company’s business synergies, standardize the management of the company operations to reduce management costs of the company. Private equity investment just how impact on small and medium-sized enterprises and the relevant theory to the Chinese market whether to use became the focus of attention. Foreign research results show that the involvement of private equity investment institutions to have a substantial effect was for enterprise growth, help been sent to the enterprise standard corporate governance structure, improve the performance of enterprises. But China’s private equity market development time is shorter, relevant policies and regulations, market, capital market is not sound, the research achievements of foreign whether suitable for our country’s environment, is worth further study.Based on China’s stock market as an example, this paper selected listed IPO after the restart of 2014 listed companies as samples, using the mean variance analysis and comparative analysis of econometrics method, mainly study the four sorts of content:(to the characteristics of China’s private equity market in-depth analysis, analysis for the effects of private equity investment on the profitability and growth; analysis the background of the first round led private equity institutions(whether state-owned and whether well-known) for the company’s profitability and growth; the influence of the analysis of characteristics of the first round of investment(in the first round of investment proportion of equity and the first time interval distance between IPO) effect on the company’s profitability and growth.)The results show that:1. In terms of profitability, no private equity companies have better than private equity investment company, including earnings per share index in significant difference under the confidence level of 0.05. Has private equity investment in growth of enterprises is better than no private equity investment, the revenue growth rate at 0.1 significant level difference is significant.2. In terms of profitability and growth, the first round of investment institutions have a state-backed firms, which is better than the first round of investment institutions do not have the state-backed enterprise, the return on equity index significant difference under the 0.05 significance level.3. The well-known enterprises in the first round of private equity investment institutions led in terms of return on net assets and total assets growth rate is good, the well-known enterprises in the first round of private equity investment institutions led tend to do well in terms of net profit growth rate and other indicators both difference is not big, but all indicators differences are all through significance test.4. In the first round of investment account for high proportion of enterprise performance is better in terms of profitability, an indicator of earnings per share significant difference under the 0.05 significance level. And the first round of investment shares lower percentage of enterprise performance is better in terms of growth, but has not been through the difference significance test.5. In the first round of short time from the IPO companies are better in terms of profitability and growth, and return on net assets, return on total assets, net profit growth rate of three indicators under the significance level of 0.05 significant difference, earnings per share index under the significance level of 0.1 significant difference.Finally according to the result of empirical analysis, targeted private equity investment institutions and small and medium-sized enterprises put forward countermeasures and Suggestions:(1) advice to private equity investment institutionsAfter 20 years of development, China’s private equity investment has gradually mature, but too pursuit of short-term interests, investment stage still exists on the situation. See from the data, the first round of investment from the IPO time for an average of 4.5 years, while the first round of investment from the IPO time accounted for 71.56%, lower than average Chinese private equity investment remains to be further forward, give full play to the role of private equity investment to help small and medium-sized enterprise growth., on the other hand, in the first round of investment proportion, according to the first round of the investment of more than average was 13.33%, the percentage shares lower enterprise growth better, and better account for high proportion of firm profitability, it also related to the market good for for-profit companies more popular, so the first round of investment proportion is unfavorable and exorbitant, so more conducive to the long-term development of the enterprise.(2) for small and medium-sized enterprisesSee, from the data listed successful companies, 63% have the form of private equity investment, and private equity investment institutions of enterprise growth is better, it shows that in China, the role of private equity investment for the development of small and medium-sized enterprises is more and more big. In addition, when choosing private equity institutions, small and medium-sized enterprises should choose to bring their companies in addition to the financial aspect of other resources, such as a state-backed private equity can bring help is huge.