A Case Study On The Route Of Perfect World Returning To A-Shares

Since the early domestic capital market had the relatively high entrance threshold while the oversea capital market had lower requirements,therefore,those corporates that owns great expectations but had poor performance in profitability decided to pursue overseas listing,with the intention to rise reputation and expand financing channels.Those corporate who were listing in overseas capital markets were being called Chinese Concept Stock.Recent years,Chinese Concept Stocks has been treated coldly in overseas markets,their stock prices remained low during long periods.Meanwhile,domestic capital market was enjoying the prosperous development,the policies and systems were being gradually perfected,more and more Chinese Concept Stocks began the way of privatization and seek for relisting in Ashares market.Perfect World,as the most representative Chinese Concept Stock in game industry,also began privatization in 2015 and successfully returning to A-shares in 2016.This paper used the case analysis research method,based on the existed domestic and overseas researches,combined with relevant theories,took the case of Perfect World returning to A-shares as the research object,introduced its returning routes in detail.Centered on the returning routes,this paper analyzed the motivations of the privatization,the decisionmaking process and characteristics of the routes,and the company performance in A-Shares market after returning.There are two aspects of reasons for Perfect World’s privatization and returning to A-shares: for the privatization motivations,the stock price of Perfect World was highly undervalued during a long period in America,which was mainly caused by the hunting of short-selling institutions,the development differences of game markets,and the logical differences of valuation in capital markets,as well as the operating difference of game companies between the China and America;Perfect World’s returning to A-shares mainly due to the attraction of domestic investment institutions,the inspiring policy environment and the successful experiences of other Chinese Concept Stocks,as well as the needs of its business transformation and strategic aims.In the decision of the returning routes,unlike the normal routes,Perfect World chose the pattern like “backdoor listing,then privatization and nonbackdoor M&A”,by which the returning efficiency was greatly improved.After Perfect World’s returning to A-shares,through the analysis of its market performance and financial performance,it was found that it has obtained high CAR in the short-term.And the stock price fluctuations performed well in the long-term,and the valuation level has been obviously improved in the meantime,which showed strong vitality;In terms of financial performance,by using the financial indicators analyis method,it was found that the profitability,solvency and growth ability of Perfect World has been significantly improved after returning.The routes of Perfect World returning to A-shares had a rich promotion value for other Chinese stocks.Other Chinese Concept stocks should learn from Perfect World’s returning routes dialectally according to their own situations.Based on the results of the case study of Perfect World’s returning to A-shares,this paper provided enlightenments for returning decision,routes selection and return timing choosing for those Chinese Concept Stocks who are preparing for returning.It is expected that through the research of this case,the relevant researches on the routes of the Chinese Concept Stocks returning to A-shares can be enriched,more practical support and theoretical reference can be provided.