A Research On Performance And Risk Of Backdoor Listing Of Property Company

In new century, the real estate industry has become an important pillar of the economy in China. But there are also emerging numerous crises following with its rapid development. As a kind of capital-intensive industry, sufficient funds is the crucial basis for the real estate business and at the same time, financing has become a key issue. In China, real estate enterprise funds mainly rely on bank loans, which are currently more and more becoming a limit. Especially for the increased risk of commercial bank loans, many banks are applying credit limiting policy for real estate companies. Then listing has become an expected way to expand financing channels for many real estate companies.Affected and limited by macroeconomic policies, there are only few large real estate companies up to the IPO standards. However, the real estate business in China is still mainly made of small and medium enterprises which is hard up to IPO standards. And many real estate companies try to avoid the IPO limitation by backdoor listing.From the distribution of backdoor listing companies, real estate companies have accounted for half. Therefore, it has important significance to in-depth study the principles of backdoor listing real estate company, the backdoor listing model and earnings after backdoor listing and summed up the advantages and disadvantages for enterprises.In this paper, 10 successful backdoor listing real estate companies were selected as samples and compared in terms of the size of the shell company, backdoor programs, risk and gain. In the case study, this paper analysed Jinke Group which shells ST East source and judged its listing by comparing the samples. Finally, paper summed up some problems appeared in the backdoor listing of real estate companies in China and made recommendations.We draw the following conclusions:1.From the case analysis that Jinke Group which shells ST East source, shell company ST East source improves its original asset quality, changes company difficult business position and strengthens company business capability through absorbing and merging Jinke group;the party seeking for backdoor listing has expanded financing channels depending on the capitalist market to enter into broader market.2.If the real estate enterprises want to choose backdoor listing, it not only requires to consider their own situation but fully recognize the external environment to choose the shell companies and backdoor mode suitable for themselves.3.In the process of backdoor listing, the real estate enterprises should pay attention to the risks and rationally avoid them; the suggestions are made on choosing the shell companies cautiously and the appropriate transaction way, the precautions against governmental interfere, promote the enterprises to be listed as a whole, the reform of enterprise financing method,etc.4.After employing backdoor listing, companies should also consider the various aspects of integration and financing.