A Study On The Equity Financing Problems And Countermeasures Of Shandong GH Pharmaceutical Co.,LTD.

This article take Shandong GH Pharmaceutical co.,LTD,a pharmaceutical commercial enterprises,as the research object,try to analysis the reason for the problems appeared in the process of equity financing and provide solutions.Shandong GH Pharmaceutical co.,LTD need to raise a certain amount of money for their projects.Private equity investment is a new way of capital operation.Recent years,it develops in a tremendous speed in China.Many sorts of industries can be the invest target of private equity investment institution.In modern society,the public awareness on medical and health is gradually strengthen,make private equity investment in the pharmaceutical industry see the business opportunities.Their investment is more inclined to enterprises that developed better in the pharmaceutical industry.GH Pharmaceutical belongs to the health care industry which is a kind of new high-tech industry.This industry is much easier to raise private equity investment,especially venture capital.Because the venture capital prefer small and medium-sized high-tech enterprises in the start-up period,like GH Pharmaceutical.As a result the company has obtained investment funds from private equity institutions.It also need to sign VAM(Valuation Adjustment Mechanism)which made the company to ensure the annual yield of itself.Besides,it should guarantee the investment institutions about the investments exiting.There are a number of private equity’s exit way,the ideal is to successfully make the enterprise go public.However,due to the deficiency of marketing and business management,Shandong GH Pharmaceutical temporarily can not satisfy the listing standards.In order to help the company to improve their profitability and competitiveness in the industry,meet the listing requirements as soon as possible,make private equity investment to exit the enterprise,reduce the excessive influence of investment institutions,this paper analyzes the company’s operation ability,profit ability deficiency that based on the company’s nearly three-year performance.It also analyzes the risks the company may face in the process of going public,analysis the reason and effects.The paper will help the company find risk prevention countermeasures in advance,and play a certain reference role for other small and medium-sized pharmaceutical commercial enterprises in the same industry which are in need of financing.