Relation Between High-split,reduction Of Large Shareholders And Regulating Effect Of Operating Performance About Growth Enterprise Market

After the of non-tradable shares reform,China's capital market has greatly improved its liquidity,but plenty of financial chaos has followed,which not only caused market disorder,but also damaged the interests of investors seriously with many other problems.The High-split program that listed companies have launched and the increasing hot pursuit for the concept stocks of High-split of investors is one of the chaos.Companies in Growth Enterprise Market with the characteristics of"High-split" and "High-growth" are attracting more attention in this field.In GEM,the ratio of companies that launched High-split program is much higher,and it seems to be more reasonable for these company to launch High-split program in GEM with their nature and characteristics,which made most of the small and medium-sized investors more willing to believe that the companies value the trends of their future,and easier to take the initiative to drop into the trap of large shareholders'arbitrage which damage the interests of small and medium-sized investors.In April 2018,the two major exchanges issued the "Guidelines on disclosure of information on transfer of high proportion shares of listed companies on the Shanghai stock exchange(draft for soliciting opinions)" and the "Guidelines on information disclosure of high proportion shares of listed companies on the Shenzhen stock exchange(draft for soliciting opinions)",which aim to severely supervise on the disorder of the High-split stocks.Based on this point in time,this article starts from the perspective of the relationship between the High-split and reduction of large shareholders,set the reduction more than 1%of shareholders whose holding are more than 5%of the split-stock company in six months after announcement during 2012-2017 as the research sample,the results of the empirical research show that:There is a huge relationship between the High-split and reduction of large shareholders.According to the proportional relationship,among all the companies that shareholders reduced their stock holdings,the reduction ratio of large shareholders is positively correlated with the proportion of split.According to the nature of the company,comparing to those companies that introduce the ordinary stock split plan,the companies that introduce the High-split plan had the higher the reduction ratio of large shareholders.When refining the focus on the operating performance,the better the profitability,cash flow transforming ability and growth ability,the smaller the reduction proportion of large shareholders holdings.At the same time,the ascension of cash on equity and revenue growth rate has a negative regulatory role for the positive relationship between High-split and reduction of large shareholders,but return on equity does not.Therefore,the company's High-split plan is deliberately planned in advance,and it is a behavior that the large shareholders choose to reduce the stocks of poor performance companies to gain high transfer arbitrage,regardless of the violation of the interests of small and medium-sized investors.This kind of behavior has destroyed the order of GEM market to a great extent,jeopardized the vital interests of medium and small investors,and also left great hidden dangers for the company itself.The innovation points of this article are:First,after the new rules of High-split,unlike previous studies' definition of "High-split",in this paper,according to the regulations of the Shenzhen stock exchange's latest definition of "High-split" of the GEM to define it,and use the data of most recently years of 2012-2017 before the new rules,in order to measure and to explore the effect of new regulation for further study after 2018.Second,most of the previous studies on "High-split" stocks and the reduction of large shareholders' holdings focused on the main board,while this paper focused on the GEM which has greater risks,which broadened the research on flied that outside the main board and enriched the research results about the GEM.Third,this article is not only focus on "High-split" stocks and the reduction of large shareholders' holdings,but also take operating performance into consideration from the profitability,cash flow,growth,these three aspects to make a thorough analysis.Therefore,this paper combining the various business performance and High-split to measure the regulation effect of the relationship.