Analysis On The Financial Effect Of Asset-injected Private Placement Of Listed Companies

Since the reform and opening up,our national economic development has been changing gradually from planned economy to market economy.The development of market economy would not be possible without the support of the capital market.Thanks to the market economy,China's capital market has opened a new chapter.After years of capital market development,remarkable achievements have been made and the financing methods have been innovated constantly.It has been playing a significant role in financing of listed companies.Nowadays,with the further development of globalization,the high-speed capital flow pattern emerged and enforced listed companies seeking for quicker and low-cost financing methods.Public issue,rationed shares cannot meet the financing needs of listed companies.Therefore,listed companies have created a new way of financing,which is private placement.Compared with public issue and rationed shares,private placement has advantages of low-cost,without performance limitation,easily approved,etc.It has gradually become listed companies' first choice when refinancing.As a new method of financing,the type of private placement has been enriched.Among them,asset-injected private placement has the dual attributes of financing and acquisition,which play an indispensable role in acquisition,reorganization and absorbing high-quality assets.Asset-injected private placement is the important transaction and will generate financial effect on listed companies.So far,in the terms of theoretical and practical research,our nations' private placement theory has been limited in announcement effect,stock price effect and shareholder wealth effect,etc.Hence,the breakthrough point of private placement study should be focused on financing effect.Conducting research on the financing effect of private placement will contribute to estimating whether it is successful and the program is scientific or not.And it is important for listed companies to make out scientific and feasible program.As China's economy and industry restructuring and upgrading,listed companies play increasingly significance role.Administration Rules on Acquisition of the Listed Company,carried out since September 1st,2006,explicitly encouraged listed companies to acquire high-quality assets by using private placement in order to make contributions to thestable progress and economical sustainable development of our country.Moreover,Shanghai State-owned Assets Supervision and Administration Commission of the State Council(SASAC)issued Several Opinions Concerning Further Push Forward Shanghai State-owned Enterprises Reform and Development in 2014,to respond to the call of the twelfth five-year plan.Thus,Asset-injected private placement is being ushered in unprecedented opportunities for development and researching the financial effects of it at practical level is more important.This dissertation research on the financial effects of asset-injected private placement combined relevant theories and case study.In theoretical components,we reviewed the research on the relationship between private placements,assets injection and financial effects of listed companies.By reading a lot of literature,we put forward to the definition of assets injection and private placement and generalized the type of them,which,accordingly,the research of asset-injected private placement derives from it.In the part of the case,the research objects of this thesis are the listed companies.By adopting the way of private placement to merge,optimizing and integrating them,Shanghai Tunnel Engineering Co.,Ltd obtained some good effects.Thus,from the standpoint of transaction participant,this paper analysis the quality of underlying assets,the financial performance of listed companies before and after private placement,shareholders value based on the announcements and annual report provided by listed companies.The estimation of underlying assets quality: after the underlying assets injected,the original two enterprises,which existed competitive relationship between them,merged into one.Meanwhile,advanced management experience transplanted,operating synergy generated and horizontal competition eliminated,the competitiveness,net profits and assets quality of Shanghai Tunnel Engineering Co.,Ltd has been enhanced.The financial performance before and after private placement: this paper deeply analyzed the listed companies' financial effects of private placement based upon liability,operation capability,profitability,development capability.It suggests that all of those have been boosted.The estimation of shares and shareholder value: by adopting the case analysis method,the paper concluded that the stock price will fluctuate significantly before and after private placement.The shareholders' assets value transformed into stake value and the valueevaluation metrics can be securitized.Then the stock price will rise and the shareholder value will enhance as well.In conclusion,the private placement of Shanghai Tunnel Engineering Co.,Ltd is succeed and the goals of purchasing high quality assets,improving main business structure,boosting profitability and underlying assets quality have been realized smoothly.Finally,we sum up the experience of private placement and provide listed companies,which are planning or preparing for private placement,with several suggestions.Combining theory with case,from the standpoint of transaction participant,by using the methods of quantitative,qualitative analysis,empirical research and criterion research,this dissertation analyzed the financial effects of private placement.The research results indicate that the asset-injected private placement of Shanghai Tunnel Engineering Co.,Ltd proved to be successful and generated good financial effect.The possible contributions of the thesis are that it has created an overall analytical framework concerning the financial effect of private placement study from the perspective of transaction subject.