Study On Financing Strategy Of Neeq-listed Companies Preferred Stock

Preferred stock,as an internationally common share variety and important financing tool,is widely used by most enterprises.A set of mature systems have been formed abroad.However,in the view that capitalist market develops incompletely,preferred stock is rarely known.National Equities Exchange And Quotations,also known as “New Third Board”,as the platform to develop and support SMEs,has been devoted to providing diversified financing services for enterprises.Since it includes the majority of quality SMEs,it is urgent to study the New Third Board.The development of China's multi-level capitalist market is deeply affected by the New Third Board.However,to solve the problem of enterprises' difficulties to finance has been one of major issues for China's economic development.As policies related to preferred stock were issued late and few enterprises adopted this way of financing,it is necessary to study existing financing strategies of preferred stocks.Therefore,this paper,based on financing strategy theories,combines characteristics of New Third Board and takes preferred stock as the entry point to study financing situations of SMEs in China from a new perspective.Thereby,it also provides references for multi-level capital market system.This research selects the enterprise that was the first to successfully issue preferred stock—ZS as the research object,attempting to explore preferred stock financing strategies for enterprises.It can provide supplementary case study for researches in this field,which is of realistic significance for SMEs to open new financing channels.Methodology employed in the paper is a combination of several approaches,including comparative analysis,inductive analysis and chart analysis.As domestic and foreign scholars provided few research literature for preferred stock,this paper adopts inductive analysis and combines it with enterprise strategic management theory and financial cost management theory.Besides,it integrates domestic and foreign scholars' research results to construct a main theoretical framework.Listed enterprises of the New Third Board Market can choose diversified financing tools.The comparative analysis method is used to compare three ways of financing,i.e.,additional stock issuance,stock pledge and preferred stock,which directly presents differences and evaluate effects generated by different financing strategies.Meanwhile,this paper carries out chart analysis to complete cost analysis and performance analysis with ZS financial data in the process of researching preferred stock financing strategies.The paper is structured as follows:The first part is the introduction,which introduces the research background and research significance.The figure presents the technical route and a detailed description of the paper's structure and technical method.At the same time,it explains limitations and contributions of the research,thereby simply outlining the basic framework.The second part sorts out related theoretical basis,briefly introducing the company's financing theories and common ways of financing.Then,it depicts the development history of preferred shares and the review of preferred stock research literature at home and abroad.Thus,it lays a theoretical foundation of the research.The third part describes basic information of ZS Company and analyzes its internal and external environments.Referring to the characteristics of the enterprise's additional stock issuance and stock pledge financing and combined with its financial data,it analyzes its actual financing capacity,which offers comparable reference materials for the enterprise to select preferred stock financing strategies.The forth part analyzes ZS's financing strategies of issuing preferred stocks.Through comparative research and data analysis,it identifies problems and risks from strategy and performance analysis.Due to preferred stock's double-attribute of stock and bond,its short-term cost is lower than bond financing and conductive to the enterprise's financial structural optimization.Nevertheless,its reimbursement risk is still inestimable in the early stage of plan design.This paper reaches the following conclusions:ZS's attempts in preferred share financing can be spread to similar SMEs.The flexible financing strategy of preferred share enjoys advantages in optimizing capital structure and reducing financial risks that single financing strategy cannot compete with.However,it must combine with enterprise capital structure design in the early stage,fully communicate with shareholders and control risk factors.Promotion of preferred stock cannot be independent from China's system formulation.For enterprises in different stages,especially SMEs,financing should be considered at a higher level,together with corporate governance while they enjoy policies and benefits.Only in this way can diversified financing tools get stronger and developed.Main Contributions of this PaperFirst,with the combination of preferred stock's development in China and New Third Board Market,it sorts out researches of domestic and foreign scholars.In addition,the author explains the application of preferred stock financing in SMEs on the New Third Board by collecting practical data from financing institutions and departments.Moreover,this paper mainly studies the development,implementation,financing effect and risk control of preferred share financing plan of listed companies on the New Third Board.With few successful cases on the New Third Board as analysis objects,this paper tries to obtain a replicable model.This paper's research results can provide references and suggestions for financing choices of the enterprises on the New Third Board.