Study On The Optimization Of Capital Structure Of Hunan HL Seed Company

Indicators of capital structure on corporate profitability including asset liability ratio and equity concentration degree have important influence on cooperate profits,which can be explained by property right theory and non-symmetry-information theory.Facing intensive industry competence,seed companies must pay attention to improve company value,through optimizing the capital structure and upgrading the management level of enterprise governance.At the critical moment of China's seed industry consolidation,this study points out the financing problems faced in the development of Hunan HL Seeds Industry Company(HLS)and the bottleneck of the lack of strategic cooperation.It also analyzes how to enhance the market value by optimizing the capital structure,stimulate entrepreneurial potential,and improving management level enterprises etc.The main content and conclusions of this study include: At first,enterprise analysis showed that HLC has the advantages of policy and project support,of scientific research and products,of marketing network,of management and human resource,of unique geographical,of base as well;as for the disadvantages at the same time,they are greatly crucial to further improve the strength of the company and brand image,quicken the late start of the production base construction,strengthen the imperfect after-sales service and improve the potential financing capacity.These are the internal causes for the company to optimize the capital structure.Secondly,according to the results of the industry and business analysis,combined with corporate strategy and business objectives,the implementation plan that for HLC's capital structure optimization has been formulated.According to the requirements of the strategic investors,HLC has decided to introduce the famous state-owned venture capital institutions and their related partners.At the same time,by determining raised the amount of the financing has been determined;through the capital increase,the increase in bank loans and supplement working capital,the company strategic target has also been realized.Then,after the implementation of this decision to invest in the introduction of "ten to ten" shares turn add,the company's registered capital will increase to more than one hundred million CNY that can satisfy the requirement of the national seed company qualification.Thirdly,on the basis of optimizing the capital structure of Listed Companies in China,the new board of shareholders and directorswill put forward new requirements to the company's management,as well as adjust the company's standardized operation,especially the financial system and implement the weak cash management and cost management and other aspects;at the same time,adjust and standardize the production,sales and research and development models to make sure company can be more healthy in capital market docking after the capital structure adjustment.Fourthly,the HLC has won the initial success based on the optimization of the equity structure and debt structure,on the improved corresponding governance and management level as well.To a certain extent,the decision of the optimal capital structure of the company has been tested because of the improved financial indicators,rapidly-developing branches and subsidiaries,the smooth construction of the industrial park.In conclusion,based on the existing theoretical and empirical results,using the successful experience and method of other cases,this study proposals some suggestions and implementation plans for improvements of HLC's capital structure,which is constructive for the sustainable development of HLC and can be expanded to other Chinese agricultural seed companies.