Analysis On The Motivation And Effect Of Dual-class Share Structure Listing

Double-layer shareholding structure This new type of shareholding structure is inevitable with the change of internal and external economic environment and the change of the needs of enterprise owners and management.In recent years,more and more companies have favored listing on a two-tier equity structure.The decision of the Hong Kong Stock Exchange to allow companies to list in a dual-layer equity structure in April 2018 also provided an opportunity for Chinese companies to adopt this type of equity structure,so Xiaomi Group became the first to be listed on the Hong Kong Stock Exchange with a duallayer equity structure enterprise.Based on this,this article chooses to take Xiaomi Group as an example to study the motivation and effect of its dual-layer equity structure listing.This article combs the relevant literature about the motivation and effect of the company's dual-layer equity structure listing,and on the basis of the dual-layer equity structure theory,expounds the overall situation of the company's dual-layer equity structure listing.Taking Xiaomi Group as a case company,it first analyzes the reasons for its listing and the selection of a dual-layer equity structure for listing.Secondly,combined with the motivation,the effectiveness of the listing of the two-tier shareholding structure is evaluated by satisfying the demands of shareholders,a group of stakeholders.In view of the core appeal of the founding shareholders is to guarantee control rights and achieve long-term growth of the company's value;other appeals are to reduce operating and financial risks and improve market recognition,etc.,so this article uses comparative analysis,data analysis,financial indicators and Xiaomi Group stock offering Situation analysis: The stability of Xiaomi Group 's control rights,the future growth of Xiaomi Group(R & D investment,patents,personnel composition and market share),the use of raised funds,the company 's financial performance and market response;given the core demands of small and medium shareholders It is to obtain economic benefits,so this article uses company dividend data and market share price changes to analyze the impact of small and medium shareholders' appeals.Finally,it pointed out the risks faced by Xiaomi Group in adopting a two-tier equity structure and made recommendations.This article finds that companies tend to adopt a two-tier shareholding structure because on the one hand they can guarantee the control of the founding team,and on the other hand they can ensure the stable development of the enterprise.The motivation for the listing of Xiaomi Group is to raise funds to meet the needs of specific purposes;to avoid the repurchase of preferred shares and reduce operational financial risks.The choice of listing with a two-tier equity structure is to solve the contradiction between financing and dilution of control rights;to prevent malicious mergers and acquisitions and achieve long-term value.After the listing of the dual-layer equity structure of Xiaomi Group,its control power is relatively stable,its growth potential is huge,and its core appeals can be realized;the profit of the smartphone segment shows a downward trend in the short term,but this is not necessarily related to the dual-layer equity structure.The risk of debt servicing has been reduced,and retail investors and some institutional investors have more recognition for Xiaomi Group;the appeal of small and medium shareholders to pursue economic benefits has not been fully satisfied in the short term.Due to the relatively short time to market and little data,the long-term performance of Xiaomi Group is difficult to demonstrate,but in general,the development potential of this shareholding structure is huge.