Research On Determinant Factor Of Private Plcement For NEEQ Stock

Our country has been committed to enrich the structure of capital market helping all kinds of companies solve financing problems in recent years. It is in this period that the new three board market(NEEQ) came into being. The market has achieved good performance since expansion in 2012. Now the market has become a good financing platform especially for small and middle-sized enterprises with the number of listed companies increasing and refinancing amount rising. The three board market has been regarded as admission qualification for enterprises of small or middle-sized to enter capital market. In real terms, only a few enterprises refinance through private placement. As a matter of fact, it is really important to study which determinant factors make influence on private placement of companies listing on new three board, which will offer theoretic basis for some companies with intention of refinancing on new three board. Besides, several advices concerning future development of the market could be put forward based on the study.This paper selects companies listing on new three board from 2013 to 2014 as samples and combines theoretic with empirical studies to research determinant factor of private placement for these listing companies. On the one hand, the study finds that there exists three factors making impact on private placement decision. First factor is financing aspiration of controlling shareholders. These shareholders would rather protect their control benefits than refinance by private placement. Second factor is market timing especially for companies with poor profitability. These companies would intend to select suitable timing to determine their financing policy. Third factor is concerned with fundamentals of companies. The listed companies with high growth rate are more likely to conduct private placement. On the other hand, once financing decision has been made, financing scale mainly have two factors. One is market timing selection. Those companies with high book-to-market ratio tend to refinance through private issue. The other factor is still fundamentals of enterprises. However, only good profitability and growth ability coexist would these companies acquire large-scale financing.Finally, the paper gives advice on future development of new three market based on previous study. In terms of companies listing on board, improving corporate governance regulate corporate operation can be the best way to obtain financing in capital market. In terms of whole market, it is also critical to make supervision on corporate operation. Only when the enterprise itself and external supervision are improved at the same time, would financing problems be solved healthy development of market be realized.