The Research On The Reasons And Routes Of Return Of China Concept Stocks

Early Chinese capital market had a high entry threshold for the company's profitability and size.It was so difficult for a lot of companies to meet the requirements of listing so that they had chosen to enter overseas capital market for a better access to financing and convenient corporate governance.Nearly 20 years,Chinese capital market is booming with the increasingly mature mechanism and active trading.At the same time,the disadvantages of listing overseas are gradually exposed and Chinese concept stocks companies gradually realize the effect of overseas listing is uneconomical.Especially in 2011,Chinese concept stocks suffered a collective short so that the stock slumped in a long term and the cost of listing significantly was higher than the benefits.As a result,many Chinese concept stocks decided to leave the American capital market by privatization and a large part of whom were planned to re-enter the Chinese capital market,which were called the return of Chinese concept stocks.This paper uses the method of case study and selects the return of Home Inn as the case to analyze the reasons and routes of China concept stocks' return.This paper analyzes the origin,development and current situation of the Chinese concept stocks as the base of this research,next analyzes the internal and external causes of Chinese stocks' return from the aspects of support and hindrance,and builds a comprehensive analysis model,then studies the traditional routes and the innovation routes of the Chinese concept stocks' return in order to provide a reference for the Chinese concept stock companies deciding to return to China.This paper discusses the reasons of Chinese stocks' return from the aspects of support and hindrance.In terms of support,it is mainly reflected in the valuation discount rate,the location of major consumers and the listing cost of the companies in different markets,as well as the scarcity of the industry in Chinese capital market;in terms of the hindrance,it is mainly reflected in the market value and equity concentration of the target company,the attitude of Chinese regulators to the return of Chinese stocks,and the influence of international capital and popularity when the companies are included in the MSCI index.With regarding to the routes of China concept stocks' return,business structure and industry background should be considered and the companies should complete the return in innovative way instead of the ordinary one with big risk,high cost and long time-consuming.On this basis,policy recommendations are as follows:(1)the government should be decentralized,promote registration reform timely,and reduce the space of rent-seeking to improve the market efficiency,reduce the risk of supervision and improve the efficiency of listing approval;(2)the government should also improve the supervision,face up to the problem of VIE structure,and recognize its historical role while pay attention to the potential risks;(3)the government should open up the capital market to strengthen international cooperation by establishing mutual trust with overseas regulatory agencies and building the international board system for the possibility of cross-listing of Chinese concept stocks.