Research On The Return Path Selection Of Chinese Concept Stocks With Small And Medium Market Value

In 1997,China.com became China's first stock listed on the Nasdaq,followed by Sina,Sohu and Netease and other companies have also entered the Nasdaq,the prelude to the development of the Chinese concept stocks was opened.Since then,the number of Chinese concept stocks has continued to increase,and the industry's scope has continued to expand.However,this rapid development momentum has turned a corner after 2010.Due to the malicious shorting of short-selling institutions,the high cost of maintaining the listing and the attraction of the rapid development of the domestic capital market,a large number of Chinese concept stocks began to plan for return.In the early days,the way to return to the domestic stock market was to privatize,and then to dismantle the red-chip structure set up in the early stage of overseas listing,and finally seek to return through the backdoor listing or IPO in China.Later,three innovative ways of mergers and acquisitions,spin-off return and CDR return were successively emerged,and there were more choices in the way of returning domestic stocks.With the continuous improvement of CDR policies,large-scale Chinese concept stocks may choose CDR method with lower cost risk to return,while Chinese concept stocks with small and medium market value do not meet the CDR issuance conditions,how to make a choice in the remaining return paths select? This is one of the main research issues in this paper.This paper takes the case of WuXi PharmaTech's spin-off return as the main research object,and uses literature analysis,graph analysis,comparative analysis and other methods to explore the choice of return path of Chinese concept stocks with small and medium market value.Firstly,this paper summarizes the six return paths that are currently available in China.Secondly,the article further combines the characteristics of each path and the case of the Chinese stocks that have been successfully returned,and summarizes the main factors that should be considered when selecting the return path.Then,this paper analyzes the characteristics of WuXi PharmaTech's return motivation and return path,and uses the inductive path selection factors to explore the rationality of WuXi PharmaTech's choice of spin-off return.Finally,the corresponding recommendations are put forward in combination with the case.Through collation and research,the main conclusions of this paper are as follows: Firstly,the current path of returning stocks is divided into traditional and innovative.Innovative types include return of mergers and acquisitions,spin-off and issue CDRs.Secondly,the issuance of the CDR method is more suitable for largescale Chinese stocks that meet the conditions.Chinese concept stocks with small and medium market value should focus on the applicable conditions,costs and benefits of each route,and the domestic policy environment.Thirdly,in terms of applicable conditions,traditional return path and split return are applicable to WuXi PharmaTech;in terms of cost-benefit,compared with the traditional return path,the cost of split-return is large,but the benefits are more;in terms of the policy environment,the traditional return path has certain obstacles and uncertainties.Taking into account these three factors,the path of splitting the return is a better choice for WuXi PharmaTech.The innovations in this paper have the following three points: Firstly,with the change of time and the development of policies,the previous literatures are not comprehensive enough to summarize the return path of Chinese concept stocks.In this paper,the existing path of the Chinese stock market is completely combed,and the various paths are further analyzed from the applicable conditions,advantages and disadvantages.Secondly,this paper sort out the selection of the return path of Chinese concept stocks with small and medium market value,which can make the readers more clear about the current adoption of each return path.Thirdly,this paper defined the research object as a medium-and small-capital stock,which is more targeted than previous studies.Moreover,this paper chooses to take the pharmacological return selection of WuXi PharmaTech,which was just listed in IPO in March 2018,as an example,and analyzes the rationality of its choice of splitreturn.The research in this area is still lacking.