Research On The Turning Board Of The New Three Board Companies From The Financial Perspective

With the progress of the economy reform tide,China's market economy is also developing rapidly.During this period,the market economy experienced tremendous changes.At the same time,the capital market is also facing many unprecedented problems.In order to deal with the increasingly complex and ever-changing market environment,China has successively established several major platforms:the Shanghai and Shenzhen Stock Exchanges,and the National Equities Exchange and Quotations(NEEQ)-the so-called "New Third Board" for small and medium-sized enterprises.By December 2017,there have been 3,483 A-shares and 11,637 companies in the NEEQ.So far,China has formed a multi-level capital market system consisting of the main board,the GEM,the over-the-counter trade network and the property market.While the NEEQ enriches the structure of China's capital market and provides more financing opportunities for SMEs,it also comes with many challenges.Imperfect regulatory system,poor market liquidity and difficulties in corporate financing,etc,have also been problems regarding the development of the NEEQ.In order to reduce these adverse effects,the government has promulgated many policies,among which one of the most attractive should be the new board transfer policy.This policy has enriched and diversified the capital market in China and brought more opportunities to the enterprises listed on the New Third Board.From the perspective of the overall capital market,the New Third Board has a positive role to promote the development of the capital market,but its role on specific businesses is still not conclusive,and whether the existing NEEQ enterprises are all suitable for the application of this policy to their business planning is not yet clear and lacks systematic analysis.Also,the research method on assessing the impact of transfer policy on the enterprises deserves further discussion.Therefore,it is significantly meaningful to study the issue of transfer of NEEQ enterprises from a financial perspective.By hackling domestic and international literatures on the system of multi-level capital market system,reasons of stratification and influential factors of enterprise value,and adopting the combination of theory and enterprises' operation,this paper constructs the evaluation system of transferring enterprises,and analyzes the impact of the transfer policy to target enterprises by comparing the corporate condition before and after such policy.In the case study,Enterprise A is a former New Third Board listed company that transferred to the GEM in 2014.By comparing the operating condition of A before and after the board transfer,the paper summarizes the effect of transfer regarding the overall business development of enterprise in terms of the enhancement of the enterprise valuation and liquidity,as well as the increased financing costs.By analyzing and assessing the financial condition of the enterprise before and after the board transfer,the paper hopes to find out the impact of board transfer policies on specific business operations and thus provides reference for the new NEEQ companies on their transfer decision.