Case Study On Convertible Debt Financing Of Mass Entrepreneurship And Innovation Company XJ Of NEEQ

The typical characteristics of “five,six,seven and nine” is owned by the SMEs in China,which refers to the contributions of more than 50% of the tax revenue,60% of the GDP,70% of technological innovation,80% of urban employment,90% of the number of enterprises.The financing difficulty of SMEs is still outstanding even though they are the vital force of national economic and social development.In recent years,mass entrepreneurship and innovation enterprises,most of which are among the ranks of SMEs,are expanding rapidly,but they are not exempt from financing problems.The NEEQ,is the mainstay of “Mass Entrepreneurship,Innovation in all places”,and an important platform for SMEs to enter the capital market to realize the interaction between industry and finance.It takes on the mission of solving the “financing difficulty of SMEs” and provides a new way for the financing of SMEs.With the original intention remaining unchanged,it is difficult to bear the changes in the market.The transaction activity in the secondary market declines,and the amount of funds raised through private placement has declined significantly since 2018,and the financing function of the NEEQ is blocked.The good news is that China’s convertible bond market began to appear the trend of breaking the ice in 2017.The mass entrepreneurship and innovation convertible bond launched on September 22,2017 mainly supports listed companies on the innovation layer of the NEEQ,and the main part has been expanded to all listed companies of the NEEQ in September,2019.With the dual attributes of equity and option,the mass entrepreneurship and innovation convertible bonds also enable investors to balance their risks and return.What’s more,it has effectively expanded the direct financing channels for mass entrepreneurship and innovation enterprises.All these reflect its applicability with enterprises of the NEEQ.As for the NEEQ market,it is undoubtedly a good policy.Nevertheless,its market performance is not satisfactory and a strong buyer’s market formed,at the right time,there is still a long way for convertible bonds of the NEEQ.Convertible bonds of the NEEQ is a new financing method with being still in the initial stage of development,and the enterprises of the NEEQ the perception of their issuance risks and the awareness of risk prevention.Through the method of case study,this paper selects the first batch of enterprises of the NEEQ,XJ,as the specific research object,which successfully issued mass entrepreneurship and innovation convertible bonds.This paper makes an in-depth study of the whole process of XJ’s issuance of mass entrepreneurship convertible bond financing,from the beginning of analyzing and mining the financing demand of XJ,to finding the determination motivation of financing method of mass entrepreneurship and innovation convertible bonds,and exploring and discussing the influence of mass entrepreneurship and innovation convertible bond financing on enterprises,finally to identifying and preventing risks.In accordance with the financing needs,XJ company timely adopts a reasonable and effective financing method to successfully issue convertible bonds,which can provide a model for the financing of enterprises of the NEEQ,so as to expand the “Quantity”of convertible bonds of the NEEQ.XJ identified the potential risks in the mass entrepreneurship convertible bonds,and put forward risk prevention suggestions from the perspectives of the issuer,regulators and investors,so as to improve the “Quality” of the convertible bonds of the NEEQ.The results of this paper prove that the applicability of the NEEQ convertible bonds to the enterprises of the NEEQ is sufficient to prove that it has effectively opened up financing channels for SMEs,meanwhile,it is a double-edged sword with“inherent deficiencies”and“acquired risks”.All parties need to work together to achieve“getting refined internally and externally”,To achieve its sound operation for its virtuous operation.At the same time,This article finds the general characteristics of convertible bonds of the NEEQ and draws the research conclusion in order to realize the case promotion,by means of the combined analysis of macro and micro,the deep study of individual case,supplemented by the analysis of the market conditions,and combined the moderate contrast analysis with the traditional convertible bonds of listed companies.Consequently,it promotes the healthy and rapid development of the convertible bonds of the NEEQ and makes the convertible bond of the NEEQ become a tool that benefits both investment and financing parties on the market of NEEQ.