Analysis Of The Going Private Of Chinese Overseas Listed Companies

Overseas Chinese concept stocks(hereinafter referred to as CCS)as overseas listed companies with Chinese characteristics.It has always attracted the public's attention,and their development trend has also attracted widespread attention from all walks of life.Especially for China's Internet companies,not only many enterprises have gone abroad to list,but also more and more enterprises have chosen privatization and delisting under heavy pressure.Between 2011 and 2017,the tide of privatization of China's shares,represented by Shengda Interactive Entertainment(SNDA),Qihoo 360,Focus Media,has not subsided.In recent years,not only Renren,Dangdang and other companies have been delisting from the US capital market privatization.There are also enterprises such as Jumei.com and Momo that have failed or withdrawn from privatization.Although the road to privatization and delisting may not be smooth,there are still many companies in China that have considered or begun to withdraw from overseas capital markets for different reasons.This paper uses the event study method and comparative analysis method to analyze the Internet companies QUNAR which announced the demise of privatization in June 2016,and mainly studies the motivation,risk and economic consequences of the demise of privatization.Firstly,this paper summarizes the research results of scholars and introduces the relevant theoretical basis of privatization delisting.Based on the latest statistical data,this paper analyzes the overall situation and current situation of the privatization and delisting of China Capital Stock Exchange,and finds that the short-selling crisis is the most serious crisis in the history of China Capital Stock Exchange.Then it introduces the background of QUNAR,expounds its privatization delisting process and makes a number of financial analysis according to its pre-privatization operation status.QUNAR has to face and quickly solve the major problem of huge business volume and huge gross profit,but the net profit remains negative.Secondly,by studying the ownership structure,financial data and enterprise value of QUNAR,This paper holds that the main reasons for QUNAR's delisting are: the value of the enterprise is underestimated due to unreasonable valuation,the cost reduction for the future operation of the company,the integration of enterprise resources,the strategic adjustment of the company and the insufficient confidence of investors.The complicated process of privatization delisting and the change of domestic capital market make QUNAR face the risk of legal proceedings and may not return to domestic capital market.QUNAR's share price has risen slightly in a certain period of time after the announcement of privatization and delisting,suggesting that it has a short-term positive impact on itself.At the same time,through the analysis of the market excess yield before and after the announcement of privatization,we can see that the market also has a relatively short-term positive effect.This paper puts forward three development paths for QUNAR after its demise.By comparing the advantages and disadvantages of these three paths and analyzing the acquisition behavior before the QUNAR privatization,we believe that the backdoor listing will be the best choice for QUNAR to return to the domestic capital market.Finally,this paper suggests that Chinese Internet companies that want to go to overseas capital markets should think twice before going public.They should not neglect their own capabilities and development potential just because of their short-term goals and interests.Similarly,although CCS has been under various pressures in the overseas capital market,and is facing a heavy test,the reasons for the withdrawal of privatization are various,but the choice to withdraw from the overseas capital market also needs to assess the situation and make an accurate judgment on the future development of enterprises.