Study Of The Effect Of Private Placement On The Financial Performance Of Listed Company B

After the non-tradable shares reform,private placement gradually becomes an important means for listed company to regain investment besides the issue of bonds in Chinese capital market.There are more obvious advantages for listed company to regain investment by private placement compared with debt financing and public offering.Since strategic investors have advantages in capital,channel,technology and so on,listed company can make use of these advantages when strategic investors participate in their private placement.What’s more,conducting private placement through cash subscribition can relief distribution companies’ cash flow,supply capital,and group companies can be listed as a whole through subsidiaries’ private placement.In addition,private placement also has other merits such as low-requirement of financial condition and information disclosure,simple and effective distribution program,low investment cost and so on.However,many articles consider that private placement always cause discount issue and inject bad capital and overrated assets because of inadequate retaliatory means and protracted information disclosure,which will do harm to small shareholders’ interests.This article chooses company B as its research target.Taking the method of combing theories and practices and case induction,it first introduces the current condition of private placement in the industry that B belongs to.Then it introduces the means and process of B’s private placement,and reviews the shares problems showed in the process of listed companies’ private placement.And last it comes to conclusion by Du Pont Analysis and indicators in the private placement pricing,issuing targets,and four aspects of finance.Besides,it’s obvious that companies have improved their debt paying ability and profitability growth ability from the data analysis,which shows that B has an active long-term financial effect through private placement.Therefore,combining the example in this article,we could put forward related policy suggestion,perfecting related information disclosure,and support the private placement for institution investors.