A-share Listed Companies To Choose Non-public Offering Of The Reasons Of Financing And Its Impact On Corporate Performance

Private Placement (or non-public offering) was firstly adopted in "Securities Act" by China Securities Regulatory Commission October 2005. After that, "Administrative Measures for Listed Companies'Stock Issuance" was published and carried out on May 8,2006, which explicit-ly states the relative conditions, qualifications and procedures. Since then, Private Placement becomes one of the major refinancing means in the Chinese capital market. Consequently, it plays the practical role to inves-tigate why listed companies choose Private Placement as the refinancing means and what influences come from such a refinancing means.From 2007 to 2009,253 listed companies adopted Private Placement, whereas 103 listed companies adopted Public Offering. Summing up the characters of the above companies, we discover that profitability is the significant factors causing the difference in their choices. Companies without the qualified public-offering profits usually choose Private Placement, indicating that refinancing ways in China are significantly in-fluenced by the regulations and policies. Information asymmetry also impacts the choice on refinancing means of the listed companies because the small-sized companies achieve less concern from the major investors and prefer Private Placement to avoid the risk in failure of offering new shares. In addition, companies with high debt ratio tend to take advantage of Private Placement to meet their urgent demands for fund.Based on the sample that 151 listed companies'new shares in refi-nancing were purchased by cash only, this paper constructs establish the financial index system through 12 indices including profitability, debt paying ability, operating ability, growth ability and cash flow ability in order to reflect a company's generally operating performance. This paper employs the factor analysis method to reduce the dimension and select the common factor to build up the model that matches the analyzing goal and create the general-performance function. Through comparing the values of function of the sample companies, this paper shows that no ob-vious improvement occurs to the companies which chose Private Place-ment as the refinancing means.Finally, this paper further explores the reasons that the listed compa-nies pick up Private Placement as the refinancing means and possibilities that Private Placement doesn't play the positive role on those listed com-panies'operation, after summarizing the influences of Private Placement on the listed companies. At the end of this paper, we raise up a few poli-cy recommendations.