The Application For IPO Financing To Private Enterprises In Chemical Industry

Since reform and opening up,the private enterprises in China have been developing rapidly and becoming the foundation of the national economy and an important force in promoting the development of social productive forces.However,due to the limitation of the enterprise and some historical reasons,the problem of financing difficultly is the most prominent aspect in the many difficulties that the private enterprises in actual business activities faced.Hence,the key to survival and development of private enterprises is how to seek the suitable way to finance under the unfavorable external financing environment.There are two main traditional financing channels for the private enterprises in China,which are bank loans and internal financing.The companies in the chemical industry are also subject to a variety of factors so that they are hard to obtain loans from banks in the long-term.Even if passed the assessment of banks,they are usually added some asset-backed securities due to the security considerations.It will increase the difficulty to finance for these companies.The Company A needs a lot of money to develop,but it is unable to satisfy its own demand for the current status,which mainly rely on the bank loans.The simplex financing channel will limit the rapid development of Company A and reduce the ability to withstand market risks in the meanwhile.Hence,choosing to be listed in the secondary market is a solution that the private enterprises in the chemical industry like the Company A need to consider.Under such backgrounds,I try to analyze the specific financing strategies of IPO and a variety of risks met before and after IPO through explore the current financing situation and bottlenecks of current development that the Company A faced from two aspects.The one is by theory and another is by case study.It will provide reference for other private enterprises in the chemical industry which want to go public to solve its fund shortage.First of all,this article introduces the profile and the current financing situation of private enterprises in China,then subdivides into the chemical industry which Company A belongs in.Finally,introducing the main object of this paper,i.e.Company A.After the analysis of Company A's operating circumstance and future development strategies and planning,this article uses qualitative and quantitative methods to study the necessity and feasibility of Company A's IPO financing combined with the current development bottlenecks that the company faced.Then it designs the specific financing strategies of IPO through comparative analysis to choose the right mode and location to go public for Company A.The last part of this paper provides some corresponding advice and suggestions on how to prevent a variety of risks that Company A would be possibly confronted with before and after IPO.