Research On The Introduction Of State-owned Strategic Investors Into Oriental Gardens And Its Effect

The State Council clearly proposed in Document 54 Opinions on State-owned Enterprises Developing Mixed Ownership Economy in 2015 that state-owned enterprises should be supported to participate in non-state-owned enterprises through various forms,and non-state-owned enterprises with strong growth and development potential should be supported.Therefore,this paper holds that in the mixed ownership reform,not only state-owned enterprises should be encouraged to introduce private strategic investors,but also private enterprises should be encouraged to introduce state-owned strategic investors.Recent years,the development environment of private enterprises has been restricted to some extent,leading to a series of problems of the company.Under such circumstances,private enterprises choose to introduce strategic state-owned investors to help them save by virtue of the background of state-owned enterprises,so as to realize the rebirth of the company.The case selected in this paper is the leading enterprise of ecological environmental protection in China,which has the Oriental garden as "the first stock of Chinese garden".It is also one of the pioneers of introducing state-owned strategic investors into private enterprises.Therefore,the Oriental garden as the research object has a certain representative role.This paper firstly uses literature analysis to review the relevant literatures of domestic and foreign scholars on the introduction of state-owned strategic investors by private enterprises,and summarizes effect of the introduction of Strategic state-owned investors.Next,use of case study method,according to the brief review of the history of Oriental Landscape’s introduction of Strategic state-owned investors,the author analyzes the macro motivation,industry motivation and the company’s own motivation of the introduction of state-owned strategic investors.Then,from the governance effect,market effect and financial effect,this paper analyzes the practical effect of Oriental gardens introducing state-owned strategic investors.In terms of corporate governance,Oriental Landscape has reduced the degree of ownership concentration,enhanced the ability of checks and balances among shareholders,and improved the governance structure.In terms of market effect,the first introduction of state-owned strategic investors in Oriental Landscape was somewhat negative in the market reaction,while the second introduction brought good market response and improved the short-term performance of the company.In terms of financial effect,Oriental Garden has obtained a large amount of capital,improved the company’s financing environment,and improved its profitability,debt paying ability,operation ability and development ability to a certain extent.However,the company’s debt paying risk is still huge.As for EVA value,Oriental Garden’s EVA value has continued to decline in the past five years.However,after the introduction of state-owned strategic investors,the downward trend is obviously slowed down.Therefore,the introduction of state-owned strategic investors will improve the sustainable value creation ability of Oriental Gardens.Combined with the above analysis results,the author summarized the problems related to the unreasonable debt structure caused by excessive financing,the blocked transmission path of efficiency,the risk of restraining the innovation mechanism,and the definition of property rights affecting the enthusiasm of the mixed reform when Oriental Garden introduced state-owned strategic investors.It also puts forward some optimization suggestions that enterprises should treat the loose financing constraints correctly,strengthen the transmission mechanism of efficiency,correctly recognize the value of political correlation and clearly divide the boundary of property rights after introducing State Investment Corporation.