A Study On Issuing Preferred Stock Of Zhaoqing Power

The institutional level of preferred stock is relatively well-developed in the western capital market,where preferred stock financing has been fully developed.The development history of preferred stock in western capital market proves that preferred stock plays different roles in different economic periods.In a recession,preferred stock is clearly better for the equity markets,funders and investors than common stock.Preference shares in China's capital markets started late,of which market participants are working on exploring the rules,and the superstructure is in urgent need of construction.In order to keep pace with the international market and solve the problem of "high leverage" in the operation of enterprises,on November 30,2013,the State Council issued the " Guidance on the Implementation of Preferred Stocks Pilot",and four months later,the China Securities Regulatory Commission issued the " Measures for the Pilot Management of Preferred Stocks".Those documents issued by the government pave the way for the pilot and promotion of preferred shares in China's capital markets.Since then,the preferred stock financing has increased the selectivity of domestic capital market financing channel.Zhaoqing Power conforms to the pilot wave of preferred stock,opening the door to the new world of corporate single debt financing,achieving the goal of controlling the asset-liability ratio and financing cost,and providing practical experience and reference value for potential preferred stock issuing enterprises.The paper firstly introduces the background and significance of the research,and reviews the papers on the motivation,risk and effect of preferred stock financing at home and abroad,expounding the ideas and structure of this paper.Then,the theoretical part consists of the explanation of related conception,summaries of the characteristics,advantages and disadvantages and development in China.At the same time,the part expounds the theoretical motivation,risk and effect of issuing preferred stock,and takes the theoretical basis of preferred stock financing into a discussion.Then it introduces the background of Zhaoqing Power Preferred Stock Financing from the perspective of financial status and operation status before the financing of Preferred Stock.In addition,it introduces the background of Zhaoqing Power's preferred stock financing from the perspective of the financial status and operating condition before the financing,beyond that introductions of the specific procedures,issuing methods,financing object and the core terms are revealed.Case study is the key component of this paper,which analyzes the motivation,risk and financial effect of Zhaoqing Power preferred stock financing by combining qualitative analysis and quantitative analysis.Finally,based on the analysis of previous stages of Zhaoqing Power preferred stock financing,we drew universal applicability enlightenment.It's found that Zhaoqing Power chose preferred stock financing mainly to optimize financial situation of the company and maintain the stability of corporate control.The issuance of preferred stock reduces the asset-liability ratio of the company,and enhance the solvency.At the same time,common equity is guaranteed,which maintain the stability of the company's equity structure.Based on the case study of Zhaoqing Power preferred stock,we can draw the following enlightenments that the enterprises should judge the feasibility and applicability of the preferred stock before financing,balance the amount of preferred stock and reasonably determine the dividend payment rate of preferred stock and maintain corresponding profitability to reduce the risk of dishonesty,during the duration of preferred stock.With the development of capital market,ordinary bonds and common stocks cannot meet the needs of capital market growth.At this time,preferred stock,as an emerging financing channel,not only conforms to the financing needs of enterprises,but also provides new investment options for investors.At present,theoretical research is the mainstream of domestically academic activities related to preferred stock financing,on the basis of which scholars observed and studied existing cases abroad,and then found the direction and path suitable for enterprises in China's capital market to issue preferred stock.Due to the lack of follow-up research on the issuance of preferred stock in domestic enterprises,the research work combining the theory of preferred stock financing with practice needs to be pushed forward.The combination of theory and practice in the case study of preferred stock financing of Zhaoqing Power is pretty beneficial to improve the research on preferred stock in China.Since 2016,the issue of Zhaoqing Power preferred stock has been nearly three years,and this discussion,based on the specific research and analysis of business situation and financial data,provides experience for companies that intend to issue preferred stock in China's capital market.