Study On The SMEs' Equity Pledge Financing In The NEEQ

There are a large number of SMEs in China,which are indispensable parts of the economic system.They play an irreplaceable role in promoting economic vitality,increasing employment rate,promoting innovation and maintaining stability.However,they are lack of strength and there are adverse selection and other issues,which makes it difficult to finance.These problems have always existed.The NEEQ in China is open to applications from all over the country on December 31 st,2013.The NEEQ helps SMEs to expand their financing channels.Currently,private equity is the primary financing for the listed companies in NEEQ.In 2017,892 companies implemented private placements for 904 times,raising 2,355,410.27 million shares and 123.836 billion yuan.But its financing scale is limited and its procedure is complicated.Then more and more companies use equity pledge financing.1,628 companies used it in 2017 for 3,517 times and pledged 6,896,049.40 million shares.Equity pledge financing refers to the shareholders to share the quality of their holdings to the third one to obtain funds.Equity pledge financing can not dilute the equity,and can active limit shares.It also can make up for the lack of collateral.At the same time,during the period of equity pledge,it does not affect the voting rights,benefits and so on.In this paper,it combines the theoretical research and case study.It also summarizes the research about the motivation,the impact on company's performance and the risk of equity pledge financing.It introduces the theory of equity pledge financing as well.In this paper,it introduces the case of Jinghong Keji's equity pledge financing at first.And then,it analyzes the motivation,short-term market performance and risk of equity pledge financing,so it can provide advice for Jinghong Keji.The research results will be extended to other SMEs,and help a large number of SMEs to finance.In the process of writing this paper,Jinghong Keji's fanancial reports have been viewed and Wind database has been checked,from which many data and indicators have been obtained.The analyses are based on these.Through the analyses of Jinghong Keji's equity pledge financing case,it has been found that equity pledge financing can meet the funding needs and Jinghong Keji can repay the funds.Although Jinghong Keji's equity pledge financing has lead to negative short-term market performance,the pledgees do not have a huge risk,five times of eight equity pledge financing have been settled.