A Case Study On Valuation Difference In Regression Of Chinese Concept Stocks

Since October 2014,the overall trend of Chinese stock market ups and downs,from the "bull market" to "stock market crash",the changes of stock market is very complex.The concept of Chinese stocks which had been listed in overseas frequently appear in public view,activate the capital market nerves.They have announced return after delisting from the overseas,the market performance is the envy.And on the other hand,many enterprises cannot get financial investment from the early RMB funds and still hope to IPO financing through the overseas.Therefore,the Chinese concept stocks into a “siege".Since the Chinese concept stocks listed by the foreign capital market regulation,but the actual operation and economic gains mainly occurred in China,and the Chinese concept stocks is usually represented by the Internet,media,high technology as the representative of the emerging industries.Now a large number of Chinese concept stocks plan to return,will have a certain impact on the domestic stock market.This paper focuses on a hot spot phenomenon of the Chinese concept stocks return to the capital market,researches the stock valuation changes before and after the return,analysis of the factors affecting the valuation differences,and provide reference for the enterprise listed financing plan.At the same time,this paper selects the Focus Media as a case,compares the valuation difference before and after the regression and analysis of the reasons,and verifies the theoretical analysis section.In this paper,which takes the regression of Chinese concept stocks as a topic,is of great significance for the foreign capital investment enterprises,investors,capital market regulators.This paper believes that the Chinese concept stocks in the overseas capital market is generally undervalued during the current economic form,especially the U.S.capital markets.So that enterprises generally lost financing capacity,and the cost of equity financing increases,the valuation is significantly improved after the return.The valuation difference in regression of Chinese Concept Stocks is caused by both internal factors and external factors,internal factors include the financial irregularities of Chinese concept stocks when listed overseas,the structure of VIE investment risk and information asymmetry,cause a crisis of confidence.Because of the subject scarcity,the interest demands of PE institutions,the Chinese concept stocks have been speculation when return to the domestic capital market.The external factors includes overseas capital market short mechanism,legal proceedings,the delisting system is undervalued,thus falling into the underestimate value of "in the two aspects of vicious spiral" dilemma.The internal and external factors lead to stock valuation differences.There are pros and cons of the regression of Chinese concept stocks,the enterprise should concern about the actual situation to choose the appropriate listing location,and choose different strategies.At the same time,the risk in the regression of Chinese concept stocks should also cause the concern of the market,regulators should develop appropriate policies to suppress the stock market speculation and valuation arbitrage,to protect the interests of minority shareholders.