Analysis On The Financing Effect Of Haier Zhijia’s Issuance Of Convertible Bonds

Since 2017,the implementation of the new refinancing regulations has led the convertible bond market in China to a stage of rapid development,with more listed companies achieving financing through the issuance of convertible bonds.Many enterprises rely on convertible bonds to achieve low-cost financing,which has brought good financing results.However,there are also some enterprises that blindly follow the trend,leading to frequent company situations and adverse effects on the order of the capital market.Therefore,studying the financing effect of convertible bonds has good theoretical and practical significance.This article takes Haier Zhijia Company as a case sample.Firstly,it introduces the background of the case,analyzes the motivation for the company to issue convertible bonds,and sorts out the issuance process and specific terms.Secondly,the event study method is used to analyze the market’s response to this bond issuance from both short-term and long-term dimensions.Thirdly,the principal component analysis method is used to evaluate the financial effects before and after the issuance of bonds.Finally,draw conclusions and provide suggestions for reference by other companies in the same industry.The research draws the following conclusions: First,the market presents a significant positive reaction to the issuance of Haier Zhijia convertible bonds.The overall trend of cumulative excess returns,both short-term and long-term,is upward,indicating that investors are optimistic about the company’s development prospects.However,during the existence of convertible bonds,there is a reduction in the holdings of major shareholders,resulting in a negative excess yield for a period of time.Therefore,relevant departments should strengthen supervision,limit the proportion of major shareholders to subscribe,and maintain a good market order.Secondly,by issuing convertible bonds,Haier Zhijia has optimized its capital structure,reduced financing costs,stabilized its equity structure,reduced agency costs,and promoted the recovery of accounts receivable.Overall,it has promoted the company’s performance and optimized its management.Third,Haier Zhijia’s debt issuance has reduced short-term investment efficiency,but has significant long-term returns.The main reason is that the construction cycle of the raised investment project is long and cannot generate revenue in a short time.The company should accelerate the progress of the raised investment project,carefully plan and organize it,and strive to make the raised investment project put into production as soon as possible.Fourth,convertible bond financing has caused a serious inventory backlog in Haier Zhijia,and the turnover rate has decreased.The main reason is that the company has greatly increased its production capacity by improving its production lines,but sales cannot keep up with the production speed.The company should strengthen operational management and internal control,develop a sound inventory management system and sales strategy,and promote the circulation of inventory.This paper can provide reference and reference for enterprises in the white appliance industry to issue convertible bonds,thereby optimizing their own financing path.