Research On The Motivation And Performance Of Low Valuation Chinese Stocks Returning To The A-share Market

Since 2011,the wave of overseas listings has gradually receded,and many Chinese companies have chosen to return to the domestic capital market after delisting overseas,such as Storm Technology,360,etc.In June 2015,360 announced that it had received an offer to privatize,officially withdrew from the New York Stock Exchange in July 2016,and officially returned to the domestic A-share market on February 28,2018.This took a total of 32 months.What are the motivations for 360 decision to return to the domestic A-share market? Will the return to the domestic A-share market help improve the overall performance of the company?Based on the research of many domestic and foreign scholars,based on the information asymmetry theory,value revaluation theory,and circumvention supervision theory,this article first briefly analyzes the overview of stock return in China,and then chooses to return to the domestic A-share market after delisting overseas.Take 360 as an example,and start discussions from three aspects of return motivation,planning and performance.In this article,the main reasons for the return of 360 are attributed to obtaining high valuations for development,company strategic adjustment needs,reducing listing maintenance costs,seeking a stable listing environment,and supporting government policies.This article analyzes the planning of returning from three aspects and its expected impact on performance: the choice of path,the choice of shell resources and the transaction plan.It is found that backdoor listing is the most suitable path for 360;The main reasons for SJEC as a shell resource are the clear background,low market value and poor operating conditions;the planning of returning is expected to improve the performance.This article combines non-financial effects and financial performance to analyze the effects after the regression of 360.The non-financial effects analysis includes the analysis of company value changes and company strategy adjustments.It is found that although the market value of the 360 has increased significantly in the early period of the regression,it gradually appears in the later period.The price-earnings ratio has fallen and the market value has shrunk.At the same time,it has been found that the return is conducive to the long-term development of the company’s strategy;financial performance analysis includes analysis of profitability,operating capacity,debt-servicing capacity and growth ability,and it has been found that 360 returns to the A-share market have advantages and disadvantages Its profitability and solvency have been enhanced,but its operating capacity and growth capacity are weakening.And there arepotential risks of increased competition in the industry,risks of business management and strategic transformation,and risk of failure in performance commitments.This article hopes that through in-depth research on the causes and performance of the return of Chinese stocks,it will make recommendations for 360,Chinese stock companies,and the regulatory authorities.