Case Analysis Of Estar's Gambling

With the rapid development of Chinese market economy,many medium and small-sized enterprises in China have encountered financing difficulties.The enterprise will have huge funding gap when it's at the high speed development stage,however,the enterprise self-characteristic and self-risk determines it can't apply for large bank loans and it's no aptitude for listed financing or debt financing.At this time,private equity investment is talenting showing itself,because it's can't increase the corporate debt burden and financial burden and bring high value-added for enterprises.In practice,private equity investment has its unique advantages.Firstly,recognized by private equity institutions can improve the image of financing enterprises;Secondly,private equity institutions can not only provide financing for financing enterprises,but also provide professional knowledge,management experience and commercial connections.Based on the above advantages,the enterprises need private equity capital in each cycle of development and growth.Because of the financing enterprises have uncertainty of development prospects and information asymmetry,so private equity investment and financing enterprises need establish "valuation adjustment mechanism"."valuation adjustment mechanism" is an imported goods for our country,which is initially applied to foreign private equity funds investing Chinese enterprises.In recent years,Chinese capital market to flourish,"valuation adjustment mechanism" is becoming more and more familiar for people.There are few successful cases,for instance YuRun food,MengNiu dairy,China Dongxiang and War Wolf 2,but due to so many enterprises isn't fully familiar with "valuation adjustment mechanism",so there appears a great quantity of failure cases,such as TaiZi milk,BiGuiYusn,YongLe electric appliance and so on."valuation adjustment mechanism" is to solve both sides of investment and financing information asymmetry,constraints and incentive financing enterprise financial tools,but because enrerprises lack of knowledge,so lead to it is incorrectly used.In this paper,combining theoretical analysis,practical analysis,game theory model and financial model,detailed introduce "valuation adjustment mechanism" related theory,in-depthly analysis YiShiDa case,summarize the following four conclusions:(1)Considering the industry environment and characteristics,choosing private equity capital is the most reasonable decision;(2)By analyzing the financial index of YiShiDa,finding YiShiDa' management was rational and fair estimates the enterprise,so that YiShiDa finished non-performance indicators(quoted on New over-the-counter Market),but not achieved performance indicators;(3)Based on YiShiDa' case,using incomplete information static game model summarizes: there should be at least 50% or more of the bet on success,otherwise it should not accept bet;(4)Subject to legal restrictions,the parties of " valuation adjustment mechanism " shall be the investors and shareholders,not the investors and the company.Base on YiShiDa' case,we sum up the following views: Firstly,it can make financing enterprises better understand the rules of the capital market,reasonable use of private equity financing channels to promote the development of their own;Secondly,it can help to expand the research methods and theoretical system of "valuation adjustment mechanism";Finally,it is conducive to further deepening the reform of Chinese capital market and helping China to build a multi-level capital market.