Analysis Of Livzon Group's B-share Reform Plan

China's B-share market was established in 1992.In the more than ten years since its establishment,it has played an important role in raising foreign exchange funds for China's development and construction,and promoted the improvement of China's securities system.The B-share market is an experimental venue for China to learn international practices and operational rules,and raises the level of practitioners in China's securities market.However,due to the emergence of foreign exchange financing methods such as H shares and N shares,the B-share market has been raising zero funds since 2005,and the B-share discount phenomenon is serious.Therefore,China's B-share market urgently needs reform.Many listed companies have adopted different solutions in combination with their own situations,including: repurchasing B shares,B shares to H shares,and converting shares to A-share.This paper uses the literature research method to analyze the development history,existing problems and their reasons of China's B-share market,and speculates on the overall trend of the future of B-share market.At the same time,this paper adopts the case study method,taking the Livzon Group as the analysis object,and studying the B-share repurchase process implemented by the company from 2008 to 2009,and the B-to-H share plan implemented from 2013 to 2014.This paper analyzes the risk categories of the two schemes,the market reaction after implementation,and analyzes the advantages and disadvantages and applicable conditions of the two schemes.The study found that the repurchase of the B-share plan requires policy's approvel,stable operating result,sufficient funds,and low financial leverage.The solution of B-shares to H-share,requires that listed companies meet the various listing conditions of the Hong Kong Stock Exchange.The study found that the discount rate of Lizhu Group after repurchasing B shares is still consistent with the average discount rate of B-share market.After the conversion of B shares of Lizhu Group to H shares,the discount rate is even more serious.At the same time,after Wanke successfully implemented the B-share to H-share plan in June 2014,Wanke's H-share discount rate also increased.The increase in the discount rate indicates that the short-term effect of the Lizhu Group's B-to-H-share plan is not satisfactory.However,in combination with the company's price difference between the H-share and the A-share in the following two years,the B-to-H-share is still relatively successful.At the same time,after comparing with Wanke,it can be concluded that the success of B-to-H shares not only needs good domestic business performance,but also needs listed companies has forward-looking vision and the courage to explore overseas markets based on the global market.