Perfect World Privatization Return A Stock Case Analysis

China Concepts Stock is a set of stock of companies whose assets or earnings have significant activities in mainland China,and they are listed and financing in overseas capital markets.China Concepts Stock are mainly listed on stock exchanges in Hong Kong and the United States.As early as 1990,Chinese companies began to go abroad and get foreign financing.In 2000,as the China's Internet industry rose and was chased by capital,three Chinese Internet technology companies,Sina,Netease,and Sohu,have successively landing on US stock exchanges,promoting the listing of China Concepts Stock in the United States.However,China Concepts Stock has not been pursued by the market for a long time.The investment discrepancies between Chinese and U.S.investors,the pressure from the US professional going short institutions,and different regulatory rules have caused the valuation of China Concepts Stock to be seriously underestimated.There were as many as 46 China Concepts Stocks being questioned for financial fraud and facing business crisis in 2011.In 2015,China issued the “Opinions of the State Council on Several Policies and Measures for Vigorously Advancing the Popular Entrepreneurship and Innovation” to encourage innovation and promote domestic economic restructuring and industrial upgrading.The favorable policies promoted the recovery of the A-share market,and Focus Media successfully returned to A share market.China Concepts Stock listed companies in US have gradually chosen to return to A-share listing.There are two common ways to return to the A-share.The first is a direct IPO;the second is a backdoor listing.The direct IPO method takes a lot of time and cost,and it will face strict supervision and long-term queuing.After the new IPR Committee took office in 2017,the IPO auditing standards have been improved,the auditing pass rate is low,and the backdoor listing takes less time,but its cost is high.The resources of high-quality backdoor listing are scarce and the competition is fierce.With the supervision of the China Securities Regulatory Commission on the backdoor listing,the cost of backdoor listing has gradually increased.The traditional regression model was blocked,and most of the China Concepts Stocks were in a difficult position.Perfect World designed a regression plan and achieved the goal of rapid return by combining the company conditions with policies and regulations.This paper analyzes the case of Perfect World's the privatization of A-share,and concludes that the M&A regression model Perfect World adopted,effectively shortens privatization,removes the VIE structure and reduces the trading hours of A-share listing.Through the M&A model,privatization and return to A share market are almost carried out simultaneously,reducing regulatory risks and increasing the success rate of return.This article analyzes in depth the reasons for Perfect World's adoption of the model and the specific operational procedures in practice,and analyzes the potential risks and solutions in the process of Perfect World's regression.From the perspective of regulations and policies,we analyze the reasons why Perfect World adopts the M&A regression model,discuss the impact of regulations and policies on M&A regression models,and draw corresponding enlightenments and suggestions.In the current difficult situation,it provides new ideas and solutions for the return of China Concepts Stock.