Financial Performance Analysis Of Enterprises’ Listing Switch Of The New OTC Market

Owing to the expansion of the new OTC market to the whole country in 2013,the number of listed companies has increased rapidly.With the continuous development of the market,there has been a serious differentiation in the operating efficiency and asset quality between enterprises.The new OTC market has introduced the market maker system,established the hierarchical system of enterprises,and implemented the bidding Trading system to improve the market transaction volume.However,these measures had little effect.The new OTC market at present cannot meet the needs of some high-quality enterprises for capital and market visibility,so many enterprises have the desire to switch the listing board.If an enterprise is allowed to switch the listing board,that represents its operating results and financial indicators have been recognized by the capital market and investors,but it is worth exploring whether the enterprise has stable operating capacity and sustainable profitability after listing switch.Therefore,this paper will take Samsung New Materials,the first company that successfully moved to the main board as an example,to study whether listing switch is conducive to the further development of enterprises by analyzing the financial performance before and after the listing switch.This paper studies the financial performance of Samsung New Materials before and after listing switch from the following aspects:Firstly,it introduces the classification and modes of listing switch,and provides the theoretical basis for listing switch based on the theory of enterprise financial growth cycle and signal transmission;Secondly,it analyses the current development situation of the new OTC market and the listing switch in China,and synthesizes the current background of the new OTC market,finds that the new OTC market has the problems of insufficient liquidity and lack of financing,as well as the importance of establishing the mechanism of listing switch in the current capital market;Then,in the case analysis part of the article,this paper analyzed its motivation,cost,process of listing switch and changes of financial performance before and after the switch,and concluded that the financial performance of Samsung New Material improved after the switch.Specifically,the performance in profitability,solvency,and growth capacity improved significantly.The scale of corporate financing increased while financing costs decreased,and the economic value added began to increase in the second year after the listing switch;Finally,according to the case and combined with the current situation of listing switch,the paper puts forward some suggestions for companies planning to switch the listing in the new OTC market,and comes up with some ideas for the improvement of the new OTC market and the construction of the listing switch mechanism in China: enterprises should adhere to steady operation,achieve continuous growth of performance,and constantly increase R&D investment to maintain the leading position of enterprises in the industry;the new OTC market should be strengthened by optimizing layering,increasing the number of investors and market makers to promote liquidity and trading volume;establish a green channel of listing switch,and make a combination of lifting system and downward system.