Analysis On The Motivation And Strategy Of Privatization Of Chinese Concept Share

In recent years,the speed of science and technology renewal in China has accelerated,and the Internet economy is also in the stage of rapid development.Faced with the rapid innovation of science and technology and the fleeting investment opportunities,enterprises need to constantly innovate and keep pace with the times to meet market demand,which requires a large amount of funds.Listing is a way to obtain funds.However,because of the high threshold of listing in the domestic capital market,it is difficult for ordinary enterprises to meet the requirements of listing.Sometimes even if they meet the requirements,they also need to spend a long time waiting for the examination of listing.Therefore,some domestic enterprises will choose to go to the overseas capital market which don't have these constraints,such as American capital market.Such enterprises are known as Chinese concept share.Since the nineties of last century,Chinese enterprises have been rushing to the American capital market for listing.The largest number of domestic enterprises which landed in the American stock market in one year is 64.However,with the slowdown of Chinese economic growth,the development of the industry has entered the transition stage.At the same time,due to financial problems,overseas short-selling enterprises are short-selling overseas listed Chinese enterprises.Due to the domestic capital market's incentive policy for the return of Chinese concept share,more and more Chinese concept share choose to privatize from overseas capital market and return to domestic capital market.Since 2010,a large number of Chinese concept share in the United States have announced the initiative of privatization,and set off a wave of privatization in 2012.In this context,the phenomenon of privatization has attracted more and more attention,because a large number of Chinese stock companies choose to withdraw from overseas markets and some successful Chinese companies choose to return to A-share.However,due to the short rise time of privatization and the few successful cases of Chinese concept share,there are not many cases of privatization in academic circles,and there are few empirical studies,so there is insufficient literature to provide reference.In this paper,we take the case of Zhaopin's privatization as an example to study the motivation and strategy of privatization of Chinese enterprises listed in the United States.Founded in 1997,Zhaopin is one of the early career development platforms in China.Through years of continuous development,it has become one of the top human resources service providers in China.Zhaopin went public in the United States in2014.It chose the New York Stock and successfully privatized in September 2017.For the reasons of capital,law or demolition of the structure,there are not a few companies that failed to withdraw from the market after initiating the privatization.However,after the announcement of privatization,it only took 7 months for Zhaopin to succeed.Privatization is a special means of mergers and acquisitions used by enterprises in capital market.Facing the stricter supervision system of American capital market and the differences in national conditions and policies between the two countries,Chinese companies must be able to clearly choose the reasons for privatization and formulate appropriate plans in the process of privatization,which is not only conducive to the smooth development of privatization,but also conducive to the smooth implementation of privatization.It is beneficial to the healthy and long-term development of enterprises after privatization.Based on the above reasons,this paper chooses Zhaopin as a case for analysis and research.Firstly,it understands the basic situation of Zhaopin,then combs the process of its privatization.According to the above basic information,it explores the motivation of Zhaopin to choose the initiative of privatization,and studies what effective measures it has taken to success.At the same time,we can get some experience and enlightenment.It is hoped that this article will provide some reference for Chinese companies planning to go to the United States for listing and Chinese companies planning to withdraw from the privatization of the American capital market.This paper adopts two research methods,the first half adopts theoretical research,and the second half carries out case analysis on the basis of theoretical research.It makes a more detailed study on the case.The article is mainly divided into five parts.The first part of this paper first puts forward the background and significance of the study.Then this paper combs the existing literature,summarizes the literature review.Then the paper introduces the writing ideas and case study methods,and finally lists the overall framework of this paper.The second part of this paper is a summary of the theoretical basis of privatization of listed companies.Firstly,the meaning and classification of privatization of listed companies are summarized,and the motivation and specific content of the strategy of privatization are introduced in detail.This part of the theoretical introduction lays the foundation for the subsequent analysis of the successful privatization cases of Zhaopin.The third part of this article briefly introduces the case of Zhaopin,which isdivided into two sections.The first section briefly introduces the basic situation of Zhaopin,and the second section combs the whole process of privatization.The fourth part of this paper is based on the second part,combined with the third part,and analyzes the motivation of privatization.The main reasons for the privatization of Zhaopin include undervaluation of enterprise value,malicious short-selling by overseas institutions,encouragement of Internet enterprises to return to A-share in Chinese capital market,saving the cost of listing and maintenance,and strategic transformation.Next,the paper explores the methods of successful privatization of Zhaopin.It points out that successful privatization is mainly due to prudent privatization time,rational selection of privatization mode,prudent selection of buyer,reasonable formulation of purchase price and proper selection of financing channels.The fifth part of this paper summarizes the whole case analysis,and puts forward the following three conclusions: first,the privatization is a comprehensive consideration of the costs and benefits;second,undervaluation is the main reason for the privatization;third,the key to successful privatization is careful selection of strategies.Based on the conclusion of case study,this paper puts forward the following enlightenment: firstly,Chinese enterprises should evaluate the decision of going public in the United States;secondly,Chinese companies should judge whether to withdraw from the market by privatization according to strategic positioning;thirdly,Chinese companies should carefully decide the withdrawal plan;fourthly,investors should objectively treat the Chinese companies that withdraw from the market by privatization.