Research On The Motivation And Economic Consequences Of Luoxin Pharmaceutical’s Backdoor Return To A-shares

With the rapid development of the capital market,more and more enterprises have achieved their goal of "going public" through various ways.For enterprises,going public means abundant cash flow and diversified financing channels,which is to a certain extent beneficial to the long-term development of the company.Considering the high entry threshold of the mainland’s capital market,many enterprises choose to enter the less restrictive overseas capital market,such as the Hong Kong stock market.However,with the development of China’s capital market becoming mature,the release of a series of favorable policies and the increase of corporate financing needs,many companies listed abroad choose to return to the A-share market,including many companies in the pharmaceutical industry that were once listed abroad.While most pharmaceutical companies choose to return to the A-share market through IPOs or spin-offs,Luoxin Pharmaceuticals,the subject of this paper,is the first company to return to the A-share market after being privatized and delisted from Hong Kong,which is a special choice.In this paper,we combine theories of rent-seeking,synergy,and signaling with case study,literature research,and event research methods to analyze the motivation and economic consequences of the return of Luoxin Pharmaceuticals to the A-share market through a shell,and conclude the following: The motivation is that Luoxin Pharmaceuticals chose to return to the A-share market after its privatization and delisting through a In terms of motivation,Luoxin Pharmaceuticals chose to return to the A-share market through a shell listing after its privatization and delisting,and the specific motivations include: the failure of several H-share transfers,fierce market competition,increased performance pressure,industrial transformation,increased financing needs,valuation differences in the capital market,and the low cost of the shell listing;in terms of economic consequences,the analysis of financial performance and market response using the entropy method shows that the shell listing achieved Luoxin Pharmaceuticals’ goal of returning to the A-share market,although it was affected by In terms of economic consequences,the entropy method is used to analyze the financial performance and market reaction.This paper takes the return of Luoxin Pharmaceuticals to the A-share market as an example and provides an in-depth analysis of the motivation and economic consequences of the return of H-share enterprises to the A-share market through a shell listing,hoping to provide some guidance to enterprises that intend to return to the A-share market through a shell listing after privatization and delisting,as well as to make some contributions to the healthy and benign development of the capital market and to support the relevant theory from a practical perspective.It also contributes to the healthy and healthy development of the capital market and provides support to the relevant theories from the practical perspective.