The Analysis Of Gambling Agreement On Tianxing Capital

The valuation adjustment mechanism is a mechanism to adjust the valuation.It is possible to target the valuation of the company under consideration and to coordinate the risks in the gambling agreement,which has the function of advancing the transaction,and the proper incentive to operate the company.For these reasons,the gambling agreement is very common in the field of investment,and is applied to a large number of activities.China's first gambling agreement case is the Mengniu case of 2003.Since then,the gambling agreement in our country gradually began to be applied.For now,the laws of China on the gambling agreement has not yet clear the relevant regulations,but since the Gansu Shiheng Co.case took place in 2013,China's gambling agreement also began to be paid attention.In China,it was often been misunderstood because of the translation of the gambling agreement and the opacity in the application process,and even been regarded by many as a form of gambling.The use of the gambling agreement in investment and financing agreements should not be comprehensively understood or simply taken advantage as a tool for protecting the interests of investors.The gambling agreement has not been properly understood and concerned about its positive value,which has caused this phenomenon that the financier is "grieve" and blindly deny it when hearing it.Due to various conditions and other reasons,in China's capital market,the gambling agreement has not yet formed a standard,not usually been used,especially for the listed companies.Analyzing the gambling agreement from the theoretical level and the case level,including an accurate analysis of its risk,investment and financing enterprises should accept or not,and the possible consequences of using it for the enterprise,which will promote the attention from corporate management to the gambling agreement on a new level.Based on the deepening of China's reform and opening up,improving the multi-level capital market system,and promoting multi-channel equity financing strategic,focusing on private equity financing market environment,the paper uses literature research,theoretical analysis,case study and other research methods.Through the reading and finishing of the relevant literature about private equity financing and the gambling agreement,based on the analysis,refinement,induction,summary of previous domestic and international research results,comprehensively using the knowledge of economics,financial management and other disciplines,from the nature of the gamblingagreement,Tianxing Capital gambling SINA-Newchance New Energy Technology Co.as an example,making a theoretical and supportive analysis from literature about the motives and risks of using of the gambling agreement in private equity financing,finding the shortcomings of the case that Tianxing Capital gambles SINA-Newchance New Energy Technology Co.to explore how to efficiently and reasonably apply the gambling agreement in the private equity financing.Firstly,from the principle point of view,this paper analyzes and elaborates the meaning,the constituent elements,the theoretical basis of the gambling agreement and the meaning of private equity financing,and introduces the using of the gambling agreement in private equity financing.The gambling agreement,also known as the valuation adjustment agreement,is a agreement,which investment and financing sides reaching an investment and financing agreement sign,about the uncertainty of the operating results after the investment in the future business performance of investment enterprises.The elements of the gambling agreement include the subject,target and object.This paper makes a theoretical analysis on the gambling agreement from the theory of principal-agent,incomplete contract theory and real option theory.Private equity financing,usually refers to the non-listed companies financing to the private equity investment enterprises through the form of private equity investment,while investors in the investment process have a set of future withdrawal mechanism.Secondly,in this case that Tianxing Capital gambles SINA-Newchance New Energy Technology Co.,introducing the basic situation of the two companies,organizational structure,business type and the terms of the gambling between the set and implementation of the situation,which include(1)relaxing the financing constraints;(2)the company's strategic needs;(3)reducing investment risk.Thirdly,on the basis of the above,the paper analyzes the case from the situation of cost-benefit and risk in two aspects: the investor and the financing side.Cost-benefit analysis is mainly based on the analysis of the aspects of search cost,agreement signing cost,corporate governance and auxiliary cost,capital operation cost,opportunity cost,capital gains and compensation income.The risk of gambling agreements is mainly the risk of legitimacy,the risk of abuse of the agreement,the risk of operational strategy and operational risk.Lastly,after analyzing the motivations,risks and cost-benefit of the case,the conclusion of the case analysis is as follows:(1)gambling has promoted a win-win between Tianxing Capital with SINA-Newchance New Energy Technology Co.;(2)the gambling agreements of the case is single;(3)the investee's management incentive mechanism is not perfect.Andputting forward the use of gambling agreement on the revelation,which is:(1)Private equity investment is a trend before being listed on the NEEQ;(2)the reasonable assessment of the value of unlisted enterprises is the premise of success of NEEQ gambling;(3)the rapid growth of the performance of the investee is the basis for the success of the gambling;(4)the risk control of the parties to the gambling is a necessary condition for the success of the gambling.