Analysis On The Financial Effect Of Hongcheng Water Industry's Asset Injection Type Directional Issuance

The methods of refinancing of listed companies' equity are mainly share placement,public issuance and private placement.Compared rights issue and public issuance,private placement has the advantages of less restrictions,low issuance costs,and short audit period.Use private placement to achieve the restructuring of listed companies has been favored by many companies.In order to encourage listed companies to conduct mergers and acquisitions with industrial integration,the government has also introduced a number of policies to support the implementation of such private placements.In May 2006,the CSRC promulgated the “Measures for the Administration of Securities Issuance of Listed Companies” to confirm the non-public offering of shares can be used as a way to refinance the equity of listed companies.In December 2006,the State-owned Assets Supervision and Administration Commission issued the “Guiding Opinions on Promoting the Adjustment of State-owned Capital and the Reorganization of State-owned Enterprises”,which clearly defined the attitude of supporting state-owned enterprises to inject good assets into listed companies to achieve overall listing.In August of 2015,the Central Committee of the Communist Party of China and the State Council issued the "Guiding Opinions on Deepening the Reform of State-Owned Enterprises" to continue to promote the overall listing of state-owned enterprise groups.In this context,this paper studies the private placement case of Hongcheng water industry in the traditional people's livelihood field,hoping to summarize some good experiences through the analysis of the financial effects after mergers and acquisitions,in order to follow up the reform of state-owned enterprises.Provide some useful references.Asset injection is a major asset restructuring event of listed companies.The asset structure,industrial layout and profitability of listed companies will change greatly due to major asset restructuring.This paper's research framework is based on the reading literature and the specific facts of Hongcheng Water Industry's private placement.The first chapter is the introduction.It introduces the reasons for selecting the merger case and the background of the merger,and summarizes the research of the predecessors.The research ideas of this paper are introduced in first chapter.The second chapter summarizes the theoretical basis of asset injection private placement,the introduction including the type of asset injection-type private placement and the motivation the measurement of financial effects and the theoretical basis of financial effect analysis.The second chapter is the foundation of the following parts.The thirdchapter describes the incident of Hongcheng water industry's asset injection type private placement,first introduces the basic situation of the participants of the private placement and the underlying assets,and then explains the motive of this private placement,and then introduces private placement plan,finally introduced the specific implementation process of the additional issuance.The fourth chapter analyzes the financial effects of Hongcheng Water's private placement from three aspects,first analyzes the quality of the target assets,then study the change of financial performance after the asset injection,at last analyzes the change of shareholder value after the private placement.Through the analysis of these three aspects,we can get the evaluation of this private placement,and also provide support for the conclusions and experience of Chapter 5.The fifth chapter draws the research conclusions and research inspiration based on the previous theoretical pavement,event introduction and consequence analysis.This paper uses the research method combined with theory and case to conduct research on Hongcheng water industry asset injection and acquisition of Nanchang Gas,Public New Energy Company and secondary water supply company.First I find suitable theory for this papper through reading relevant literature and learning from predecessors.These theoretical foundations include the types of asset injection type private placement,the motivation of additional issuance,the theory of synergy effect,the theory of related party transactions,the theory of horizontal competition,etc.At the same time,this paper also extracted an evaluation index system according to the literature read.The evaluation index system for evaluating the effect of asset injection type private placement is mainly summarized from three aspects for instance asset quality,financial performance and shareholder value.Then the paper collects the relevant financial information of Hongcheng Water Industry through the network,newspapers and periodicals,government public documents,etc.,and uses the method in the theoretical basis to process the financial information of Hongcheng Water Industry and obtained the corresponding results.The results show that Hongcheng Water's asset injection-type private placement is generally successful,injected high quality assets,improved the overall operating capacity,long-term solvency and asset profitability of listed companies.But for short-term debt repayment and company growth ability the result is not good.In other aspects,shareholder value has been improved in a short period of time.Finally,based on the previous literature refinement and data analysis,this paper summarized the problems and experiences inthe injection of the private placement of Hongcheng water industry.Some conclusions and inspirations are summarized for enterprises that will conduct asset injection-type private placement,it can be used as a reference for private placement.