The Empirical Study On The Operating Performance Change And Determinants Of Chinese Listed Companies With Seasoned Equity Offering

With the development of China's capital market, the seasoned equity offering(hereinafter referred as SEO) is playing a more important role among all sorts of equity refinancing. Meanwhile, the operating perfomance aftet SEO becomes a hot topic which the public pay attention to. This paper may provide some guidance to the managers of the listed companies concerning the SEO decision-making, as well as the investors to make the right choice. In such a way, SEO can be a truly great channle for financing and investing, which would maximize the benefits of stakeholders.Under the background, the paper investigates the operating performance of listed companies which carried out SEO during the 2000-2006 period. The operating performance of these samples is measured by operating profit by assets. Furthermore, based on Free Cash Flow Hypothesis and Information Asymmetry Theory, it analysis the possible reasons which influence the operating performance after SEO. It was found that the operating performance of these samples did decline comparing to the performance prior to the issue. The level of free cash flow, assets, growth and PPE(Property, Plant and Equipment) would influence the deterioration in defferent extent and direction.Five parts are in the paper:Part one introduction. The background of the study and the implication of it are introduced firstly,followed by the brief framework and the innovation spots of this paper.Part two:overview of SEO. In this part, a general comparison is made among SEO, share allotment and directional add-issuance. And then, the thorough descriptions and analysis about the policies change of SEO, as well as the reaction of stakeholder. Besides that, the current state about SEO are presented, including the number and the relevant scale. Part three:literature review and comments. In this part, the literature about SEO will be presented firstly, and based on this part, the relevant literature are discussed thoroughly. Besides that, the further researching ways, the strong points and the weak points are included.Part four:the study supposition and its designation. In this part, four basic theories about the performance change of listed corporations after SEO, and pay more attention to the Free Cash Flow theory and the Information Asymmetry theory, which is the foundation of the supposition of this essay. In designation part, samples and the relevant basics are included, so is the research model of the empirical study essay.Part five:the analysis of performance change of the listed cooperations after SEO. Descriptive statistical analysis is used for the ample analysis, which is a good favor for explaining the performance slump after SEO.Part six:the cross-section analysis of the performance change. In this part, the regression model explains the relation between the performance change of listed cooperation after SEO and the key factors, such as the free cash flow, the asset scale, the growth, the investing level about the tangible assets. The effect can be confirmed.Part seven: the conclusion and the relevant suggestions. As to the study objectives in this essay, the constructive suggestions will be put forward, so will the explanation and analysis about the study results. And based on this part, the relevant suggestion will be come up with from three parts, including the listed company, investors and the supervision department.