Research On The Motivation And Performance Of Private Placement Of Huajian Group

With the help of the power of Internet and science and technology,new technologies and new industries are constantly emerging,which makes China gradually enter the era of digital economy.Meanwhile,the market competition is becoming more and more fierce.According to statistics,the average life span of small and medium-sized enterprises in China is no more than three years.In order to deal with the cruel market competition,enterprises have to seek their own way to achieve the optimization and upgrading of industrial structure.As an important way of equity refinancing in the current capital market,private placement is one of the ways for listed companies to seek transformation and development.Traditional industries achieve the adjustment of industrial structure by raising funds through private placement.At the same time,emerging industries rely on private placement to implement mergers and acquisitions,explore development advantages and take root in the market.According to statistics,there are more than two thousand private placements in China’s A-share market from 2015 to 2019,and the cumulative financing of listed companies through private placements is close to 6trillion.The motivation of private placement and its impact on the performance of listed companies are worth studying.Therefore,this article chooses Huajian group’s private placement as the research object,and adopts case studies,event study,financial index analysis and other research methods to conduct a long-term and in-depth study of individual cases.Firstly,the paper introduces the general situation of the case;Secondly,from the perspective of financing order and interest coordination,this paper discusses the reasons why Huajian group chooses private placement as equity refinancing mode;Then,from the two aspects of market performance and financial performance,this paper draws the conclusion: Huajian group’s private placement has a significant short-term effect on performance improvement,which can not only improve the company’s financial situation in many aspects such as solvency and profitability,but also improve the excess return rate of the company’s stock and protect the interests of small and medium investors;At the same time,it also shows that the asset injection of large shareholders and the participation of institutional investors in the process of private placement realize the benefit synergy effects.Finally,combined with the actual situation of Huajian group’s private placement case,this paper provides corresponding suggestions to regulators and listed companies.This paper hope to enrich the theoretical research content of private placement through the in-depth study of private placement.At the same time,this paper hope that more investors deeply understand the essence of private placement and its possible impact.Besides,research results can provide some investment reference for investors’ long-term and short-term decision-making.