Research On The Influence Of Convertible Bonds On A Company Financial Performance

The change of the big environment of the national economy as well as the change of the small environment of the industry,plus the policy adjustment conducted by the Securities Supervision Commission to the issue of refinancing of the listed company,the market of convertible bonds in China has embraced a new period of development.The year 2017 and 2019 witnessed a significant increase in the number of convertible bonds issued.Companies of various types as well as companies in different stages of development should make their decisions as to whether to use the convertible bonds to finance on the basis of self strategy of development,market condition and financing cost.The enterprise of the central area of China doing business with the securities,A Securities Co.Ltd mainly operated their businesses in securities brokerage,securities investment consultation,self operation of securities,margin trading,commission-based sell of securities investment fund,IB business,market-making business of share options,etc.The company management formulated plans in a positive manner and decided to make strategic transformation due to the downturn of the financial market from 2016 to 2017.In 2018,the company financed through issuing convertible bonds and put those capital into the operation and development of the company.This study of the convertible bonds not only posed positive impact on the financial performance of the company,but also optimized its operating structure.It is an issue worthy of studying as to how the A Securities Co.Ltd managed to finance through issuing convertible bonds and how its conduct could provide enlightenment and revelation to the whole industry of securities under the circumstances of a rather depressed economy and a sluggish capital market.The research method of case analysis was used in this article.In the theory part,this article explained the concept,features and nature of the convertible bonds as well as the application and relevant theories of the financing of convertible bonds.Then it gave an introduction of the case of the A Securities Co.Ltd issuing convertible bonds,which consisted of the basic information this company,its operation condition,its financial condition before issuing convertible bonds,design of the clause of convertible bonds,issuing time and the condition of share converting as well.Based on this case,this article analyzed A Securities Co.Ltd's successful issuing of the convertible bonds as well as its behavior of converting debt from various perspective.This article mainly conducted this analysis from the following aspects-the feasibility of issuing the convertible bonds of the A Securities Co.Ltd,scientific rationality of the clause design and the price fixing and the impact of its financial performance and shareholding structure.The result of this study showed that the A Securities Co.Ltd attracted quite a lot investors by its decision of issuing convertible bonds which was made based on the actual condition of its development and its accurate judgement of the market environment.This issuing of convertible bonds not only effectively promoted its financial performance,but also won cash flow for its transformation.All in all,this article offered suggestions about the issuing of convertible bonds from two perspectives-company itself and macro environment.