Research On Enterprise Overall Listing

On December 19, 1990, the opening of Shanghai Stock Exchange marks the official start of Chinese capital market. Problems caused by spin-off, such as related party transactions frequently, lack of economies of scale, plagued the development of Chinese capital market. In early 2004, the State Council’s opinions are supporting high quality assets to market. The TCL and Wuhan iron’s success of overall listing provide good demonstration effects. Since then, regulators have enacted a number of policies to encourage overall listing. The third plenary session of eighteen in 2013 put state-owned enterprise reform on its agenda once again. Overall listing is also attracted much attention. Auto industry is a pillar industry of the national economy. China’s auto production has been the first rank in the world for 5 consecutive years. As a typical competitive industry in the new round of State-owned enterprise reform, Chinese auto enterprise group will choose overall listing to become bigger and stronger.Overview existing literature, there are many literature of overall listing, but there are very few studies talking about a niche industry and giving some experience of different industries, especially for the case on the auto industry.This paper is mainly talking about the overall listing model of three big auto enterprise groups. The paper focuses on the whole overall listing process, specific trading solutions and the model selection. And then comparing with these three overall listing models according to listing procedures, costs, performance, valuations and earnings estimates, summing up their similarities, and providing suggestions to the other two auto groups, FAW group and BAIC group. As last, according to the overall listing of the auto industry, we give some problems which need to consider when choosing the right overall listing model for other enterprises.Through the analysis, the paper draws the following conclusions:(1) due to their own developing characteristics, three large auto enterprise groups choose three different overall listing models. SAIC chose directional issuance, Guangzhou auto group chose convertible absorption merger, and Dongfeng group chose IPO. Each model has its own innovation points in practice.(2) The effect of different models is not the same. Three big auto groups all choose to put all vehicles and spare parts into the listing assets. And the injection assets are high-quality. And they are all effective to reduce the related transactions; but SAIC and Guangzhou Auto Group which used mergers and acquisitions model are poor in enterprise performance, valuation and profitability in addition to Dongfeng Group which used IPO. Besides, three models are different in the elapsed time, steps to inject assets, financial pressure and the pricing mechanism.(3) According to the experience of three big auto groups and the existing business assets of FAW and BAIC, This paper suggests that FAW Group can choose directional issuance or convertible absorption merger, and BAIC is suitable for the selection of IPO or backdoor way.(4) When enterprises in the selection of the appropriate overall listing model, they should consider following points. Firstly, select the assets which can improve company’s valuation with the industry feature. Secondly, consider the feasibility of different models with the number of listed company in group. Thirdly, consider the fit of different models with group’s asset structure, time cost and capital cost. Finally, consider the financing needs of enterprises to choose other supporting financing scheme. In addition, after the overall listing, we also need to pay attention to positioning parent company, processing corporate governance structure and hierarchical relationship. This can strengthen effective competition among group assets, improve management efficiency, and play a synergistic effect of overall listing.