A New Path And Effect Analysis Of The Return Of Chinese Stocks

The early Chinese capital market had a high threshold for entry,and there were strict restrictions on the company’s profitability and scale.Many companies that are difficult to meet the listing requirements choose to land in overseas capital markets in order to obtain financing channels and benefits in corporate governance.Over the past 20 years,China’s capital market has developed rapidly,its mechanism has become increasingly mature,and transactions have been active.The drawbacks of overseas listings have gradually emerged.Many Chinese companies have begun to realize that the effect of overseas listings is not satisfactory.In particular,in recent years,the stock market has frequently encountered short-selling crises.The overseas capital market is also not very recognized for the development model of many Chinese companies,resulting in a long-term slump in stock prices,and the listing cost even exceeds the revenue.In 2018,the state actively recommended the “four new” economy,that is,new technologies,new industries,new formats,and new models to return to the domestic capital market,and opened up green channels for the listing of high-quality overseas enterprises.As a result,many of the Chinese stock companies decided to leave the overseas capital market by active privatization and then plan to re-enter the domestic capital market after careful privatization.In recent years,the China Stock Exchange has generally returned to the A-share market by means of privatization delisting,demolition of the VIE structure and backdoor listing.At present,a large number of well-known companies have completed privatization,such as Shanda Games,Focus Media and Qihoo 360,and successfully listed on A shares.There have been many related studies on privatization delisting and backdoor listing,but there are few studies on other possible methods and regression paths for privatization delisting.WuXi PharmaTech is the first privatization delisting company that has not dismantled the VIE structure and returned in the form of IPO,and its “one-three-three” listing model maximizes corporate value.Therefore,this article takes WuXi PharmaTech as an example to study the new operation mode of the Chinese stocks returning to A shares,hoping to learn from other Chinese stock companies and enrich the relevant literature.This paper first introduces the background of the topic selection,and briefly explains and analyzes the theories involved in the return of the Chinese stocks to the domestic market.The papers on the domestic and foreign literatures are briefly summarized according to the topics of different capital market listings,privatization delisting and spin-off listing.Overview and comments.Then it introduces in detail the whole process of WuXi PharmaTech’s privatization delisting,transaction structure design,capital arrangement and completion of domestic listing,and makes a reasonable analysis of its valuation.Finally,it is concluded that WuXi PharmaTech chooses “one-three-three” method.The choice of the return path is successful,and it is also the first case of the IPO regression of the Chinese stocks.Therefore,it is hoped to provide reference for other companies that are preparing to return to the stock market.