Studies On The Equity Pledge Financing In The NEEQ

After a company joins in the NEEQ, the introduction of market maker system enhances the equity liquidity, which leads to a result that it's possible to value the equity; as a public company, its information transparency has been improved and financial system has become more formal, as a result, all these changes make it convenient for companies when involved in equity pledge business. Compared with the year of 2014, the number of equity pledge financing trades and total equities in NEEQ show a tendency of repaid growth in 2015. Varieties of phenomena indubitably indicate that equity pledge financing has become one of the most important ways for listed companies in NEEQ to raise funds.The article selects the equity pledge financing way of Guangzhou Cronus Bicycle Fashion Sports Company Limited as a study case, and mainly adopts the methods of literature review analysis, comparative analysis, combining quantitative analysis with qualitative analysis, empirical analysis, etc. Taking the development of NEEQ as the breakthrough point, the paper briefly describes the function orientation and the existing financing ways in the NEEQ. At the part of case introduction, it details the basic information related to the case, which includes the financial status of the company, the main business situation, capital requirements and equity pledge financing situations. At the core part-case analysis part, firstly, the paper makes a research about whether equity pledge financing is allowed in law. Then based on the existing enterprise financing structure theory and the financial condition, endogenous financing ways and external financing ways are analyzed in detail, drawing a conclusion that equity pledge financing way has the feasibility and rationality. Secondly, through the analysis of financing cost and short-term market performance, the results show that equity pledge financing way has the cost advantage compared with private financing way and it has obvious characteristics. At the last part of the case-study, through the analysis of the financing risks, the paper reveals the risk problems of the financing way. Through the case analysis, the paper is aimed at providing reference for other companies which raise fund through the equity pledge financing way. Furthermore, the paper put forward the countermeasures and suggestions for the future development of this financing way.