Comparative Research Of Financial Performance Before And After Toread IPO

Initial Public Offerings(IPO)is the main way for enterprises to enter the capital marketin order to get the money needed for development,and it is an important event in the process of enterprise development,whether it is a mature foreign capital market or a gradually improved domestic market.In 2019,China launched the "Science and Technology Creation Board",and 10 years ago,in 2009,launched a similar gem.As of December 31,2019,there were 791 listed companies on the GEM.Studies have shown that a large proportion of enterprises do not see a corresponding improvement in their financial performance after an IPO.The analysis of the typical listed companies in the early stages of the GEM market opening,both for the newly listed and similar companies planning to go public,as well as their regulators,has very important guidance.For an enterprise,especially a private enterprise,the IPO is a "milestone" type event,which has a significant impact on the future business operation.In this paper,we study the IPO of Toread,one of the first companies listed on the GEM.The basic research ideas include,firstly,to consult relevant literature on capital market financing methods and channels to have a macro grasp and understanding of domestic and foreign capital market financing;then,to have a detailed understanding and cognition of the main research object of this paper,including the basic situation of the company before IPO,the motivation for listing,and the listing process;thirdly,to track the implementation process of the fund-raising project in detail;fourthly,to analyze the impact of IPO on the financial performance of the company by adopting the financial indicator method and hierarchical analysis method,using the reference value of the company three years before listing,and comparing it with the tracking of financial data seven years after listing.Finally,to determine whether this IPO was a successful IPO,and the experience and lessons learned from it will serve as a reference for companies that have just been successfully listed,and for similar companies that will be listed in the future and for regulators.By studying the Toread IPO,the following conclusions were drawn:(1)the motive of the Toread IPO was in line with the market environment at that time,the listing plan was meticulous and reasonable,and the funds raised were used as scheduled in accordance with the listing plan;(2)it can be seen from the financial indicator analysis method that after the Toread IPO,all financial indicators have improved,especially the growth ability and debt service ability were very significant.(3)From a hierarchical analysis,the Toread IPO has significantly improved its financial performance,with the average post-IPO growth rate nearly three times that of the pre-IPO growth rate: 1.08 per year before the IPO and 2.68 per year after the IPO.Finally,the following suggestions are put forward:(1)Suggestions for enterprises that have just completed the listing: strictly standardize the use of fund-raising,not to arbitrarily "change the fund-raising project";over-raising funds should be used for research and development first,so as to improve the core competitiveness of the company;at the same time as the rapid development of the company,the development quality of the company should not be neglected;after the IPO,enterprises should pay attention to the improvement of operational capacity and profitability under the premise of maintaining the growth capacity and debt service capacity.(2)To advise the regulatory authorities: to tilt the resources for listing to enterprises that emphasize research and development and have technological content;to appropriately control the number of enterprises that have over-solicited and the amount of over-solicited funds in the capital market,so as to provide an appropriate amount of financing for more enterprises;and to strictly monitor the use of the funds raised,especially the use of over-solicited funds.(3)Advise similar companies that are about to go public: companies should treat IPOs as milestones,not as terminals;bring in institutional investors and reputable independent directors as early as possible;fully demonstrate the feasibility and profitability of financing projects and develop an executable and monitorable plan;focus on research and development of products or services to provide effective products and services to their customers on an ongoing basis.