Performance Analysis Of Backdoor Listing For Cultural Media Company

The emergence of new media and communication technology has laid a solid foundation for the media industry.The media companies can thus develop in a fast path.During the rapid development,going public has become one of the best approaches to seek sufficient financial support,raise awareness,and build up a good brand reputation for future development.However,due to the high qualification requirements,the complicated censorship process and the high cost,many companies are not able to start initial public offering procedure.Therefore,most companies will be going public through a reverse takeover process rather than through an initial public offering.CH submitted its IPO relevant application materials to China Securities Regulatory Commission in early May 2012,however,CH then volunteered to terminate the application and gave up after waiting for ten months.In May 2013,CH merged with Jiangsu HongBao for reversing takeover.As the plan,CH purchased control of the public shell company Jiangsu HongBao and transformed the formerly privately held company into it.As a result,Jiangsu HongBao will become a media company.However,no one knows if CH can achieve its goal by changing primary business,improving business strategy and enhancing sustainable profitability after going public.This case is concentrating on research and analysis of CH reverse takeover Jiangsu HongBao as a shell company for going public.Firstly,the introduction includes the background,the process,the choice of the shell company and the reverse takeover model.Secondly,the financial analysis after going public includes financial and non-financial performance.For the non-financial aspect,we will focus on the effect on ownership structure,organization chart,financial process,the scale of the operation and horizontal competition.For the financial side,we will mainly focus on the accounting-based measures to entirely analyze the company's financial position after going public.Also,we will conduct a comparison between five similar companies in the same industry.Based on the research and analysis on the case,we can conclude that,CH has chosen a proper shell company,enhanced the competitive advantage,improved the management capacity and financial situation by transforming the optimization capital to replace non-performing assets.CH has been able to broaden financing channels,expand primary business and improve the management structure.To conclusion,this article put forwards some suggestions for both theprivate company who wants to go public through reverse takeover and government department.Private company should chooses appropriate means of the deal and follows the national and local policies.