Analysis Of The Motivation And Performance Of Luoxin Pharmaceutical’s Backdoor Listing

In recent years,China’s regulation and control of the pharmaceutical industry has become increasingly strict,and various systems such as the two-vote system and consistency evaluation have been implemented one by one,so that the pharmaceutical industry has gained new impetus and new ways to develop to a higher high-tech level while bearing pressure in the short term.In this context,enterprises committed to making great achievements in the pharmaceutical industry have become more and more eager for new drug research and development.However,the development of new drugs often means investing a large amount of money in a long research and development cycle,which puts higher requirements for the financing ability of pharmaceutical companies.Due to the strict review and long waiting time for IPO,many companies often choose the indirect but convenient way of backdoor listing to broaden financing channels.As the first pharmaceutical company in China to first privatize and then successfully backdoor listing after the failure of the Hong Kong stock market transfer to domestic capital markets,it is of great reference significance to discuss the case of Luoxin Pharmaceutical.This paper analyzes in detail the motivation for the backdoor listing of Luoxin Pharmaceutical and its performance before and after the listing.Specifically,this paper first sorts out and summarizes the literature related to backdoor listing,clarifies the research ideas and research methods of this paper,and expounds the innovation points of this paper.Secondly,the specific situation of the case of Luoxin Pharmaceutical was introduced,mainly including the relevant policy background,the basic situation of the backdoor and the shell seller,the listing motivation,timing and backdoor scheme of Luoxin Pharmaceutical.Then,the shortterm market response of Luoxin Pharmaceutical after the backdoor listing was analyzed by the event research method,and the financial performance of Luoxin Pharmaceutical was analyzed from four dimensions:solvency,profitability,operational ability and development ability.In addition,in order to compensate for the shortcomings of the financial analysis method that does not take into account investment capital,an EVA evaluation system has been introduced.The research in this paper found that the announcement of the backdoor listing event has played a significant role in improving the market performance of Luoxin Pharmaceutical,and indicators such as solvency have also changed significantly compared with before the backdoor listing.The results of the EVA analysis show that although the financial indicators of Luoxin Pharmaceutical have been affected by major events,the economic added value has shown a certain degree of resilience to pressure.Overall,the backdoor listing has had a positive impact on the financial performance of Luoxin Pharmaceutical.The study of the case of Backdoor Listing of Luoxin Pharmaceutical has a certain enlightening effect on enterprises listed on the Hong Kong stock market that intend to return to domestic capital markets and enterprises in the same industry that intend to backdoor listing.In the preparatory stage of backdoor listing,the shell company should be carefully selected,familiar with various laws and regulations and relevant policies,standardize the company’s operation and pay close attention to the stability of the company’s performance;in the process of backdoor listing,the timing of entering the capital market should be carefully selected and the possible risks should be fully considered,and the VAM agreement should be signed cautiously.