Research On The Risk Prevention Of "Oriental Wealth" Convertible Bond Financing

China's securities market has long been characterized by great volatility.The stock market trend is like a “mountain rider”,which has risen and fallen rapidly.It has long been a short bear and is in a long-term downturn.The characteristics of this stock market It not only affects investors,but also directly affects the profitability and business development of China's securities companies.Since the end of the last wave of bull market in 2015,China's A-shares have shown a continuous decline,which has led to a significant decline in the income of securities companies,especially brokerage business,and even the phenomenon of layoffs and pay cuts.Securities companies urgently need financing to enhance their strength.In 2017,the financing scale of securities companies has exceeded 700 billion yuan,and in 2016 this figure is about 500 billion yuan,reflecting the increasingly strong financing needs of securities companies.As of December 12,2017,at least 60 brokerages had conducted financing activities,raising a total of 706.314 billion yuan.Among them,the issuance of various types of bonds,including securities company bonds,securities company subordinated bonds,short-term financing bonds,convertible bonds,a total of 667.24 billion yuan,accounting for 94%.The key factors such as the policy encouragement and the replenishment of net capital after the conversion,the convertible bonds become the new favorite of brokerage financing.In 2017,there were 5 companies including Changjiang Securities,Guojin Securities,Zhongyuan Securities,Oriental Fortune and Huaxin Securities,the parent company of Huaxin Securities,which issued convertible bond issuance financing.The total financing scale reached 26.655 billion yuan,of which Dongfang Wealth Convertible Bonds It is planned to raise 5 billion yuan.As a new type of financing,convertible bonds have the characteristics of credit,equity and options,and play a unique role in the diversified financing structure of listed companies in China.However,as its market is still in the development stage,most listed companies that issue convertible bonds have insufficient understanding of the risk of convertible bond financing,and their risk solvency is insufficient.Although the Oriental Wealth Convertible Bonds was finally successful,the announcement of the results of the issuance showed that the Dongcun Convertible Bonds issued to public investors also had a 10.83% discount rate.As a typical brokerage representative,Oriental Fortune has abandoned the financing method adopted in 2015 and 2016 and chose the financing method of convertible bonds.This phenomenon is worthy of study.It selects Eastern wealth analysis to analyze the background of its convertible bond financing.Motivation,especially the identification and prevention of risks,can provide experience for other securities companies to use convertible bond financing in the later period.