A Study On The Motivation And Economic Consequences Of Shareholding Reduction By Major Shareholders Of Photovoltaic Enterprises In The Context Of Subsidy Withdrawal

The photovoltaic industry is a sunrise industry that has emerged as people’s demand for new energy has increased.China attaches great importance to the development of the PV industry and has introduced a number of policies to support the development of PV,and government subsidies have played an important role in the development of China’s PV industry.However,with the development of the PV industry,government subsidies are gradually decreasing and will officially stop after 2020.2021 will see the PV industry enter the era of price parity.Even under the "carbon neutral" policy,there are still significant potential risks for PV in the price parity era.These risks will also lead to large shareholders worried about future investment returns,and thus large-scale reduction of holdings in the context of the industry’s high performance growth.Although in recent years,the SEC has curbed illegal holdings by implementing stricter laws and regulations to prevent large shareholders from abusing their information advantage,absolute control,and thus infringing on the rights and interests of small and medium-sized investors,even with such strict new regulations,the phenomenon of large shareholders abusing their power for illegal holdings is still prominent and should be taken seriously.Based on the principal-agent theory,signaling theory and information asymmetry theory,this paper selects the leading PV industry company,Mai Wei,as a specific case company,and chooses the three shareholding reduction events of the major shareholder,Suzhou Jinmao,from 2019 to 2020 as the research object.By using literature research method,case study method and event study method,we deeply explore the motives and means used by the major shareholder of Mai Wei to reduce its shareholding,and look at the The study also analyzed the impact of the shareholding reduction on all parties from three aspects: market reaction,corporate financial performance and the rights of small and medium shareholders.The study finds that the motives of major shareholders to reduce their holdings include not only realizing the high level of cash gains,but also avoiding investment risks due to the increase of industry risks caused by the retreat of government subsidies and the increase of hidden corporate financial risks.In order to obtain the maximum benefit from the reduction,the major shareholders not only use the means such as disclosing good news to push up the share price in the process of the reduction,aiming at the right time to reduce their holdings at a high level,but also through a combination of block trading and centralized bidding trading method to reduce their holdings quickly and efficiently.After analyzing the financial data before and after the reduction,it was found that the reduction of shareholdings by major shareholders not only caused a certain negative impact on the market and affected the company’s financial performance in the short term,but also greatly violated the interests of small and medium-sized investors.Based on the above case study,this paper makes some suggestions at the level of government,regulators,companies and small and medium shareholders.It is hoped that the holding reduction behavior can be further regulated with a view to safeguarding the rights and interests of small and medium-sized shareholders and promoting the stable development of the market.