Research On The Private Placement Causes And Financial Performance Of Listed Companies

Since 2006,listed companies in mainland China have been refinancing by means of private placement.As of December 31,2017,China's listed companies have issued 3809 additional private placement,and the amount of financing has exceeded 7 trillion yuan.Private placement has the advantages of low threshold,simple implementation procedure,flexible subscription mode and low issuance cost,and has become the main refinancing means of Listed Companies in the mainland of China.Compared with the western developed economies,the implementation of private placement in China is still short.Chinese scholars have less research on the changes of financial performance of listed companies after the implementation of private placement,especially on the trend of long-term financial performance of enterprises.Therefore,this paper uses comparative analysis,financial indicators analysis and other analysis methods to conduct case studies on the implementation of private placement of TELLUS company,which can provide reference for other state-owned enterprises listed companies to make business transformation by means of private placement financing,as well as for regulatory departments to strengthen the supervision of the private placement.Firstly,this paper gives an overview of the concept and development process of China's private placement,and then makes a comparative analysis of the three equity refinancing modes,and finds that private placement has more advantages.In the second part,the essay will provide the background of TELLUS Group and discuss the reason of using private placement.In the third part,the short-term market effect of TELLUS Group is studied.It is found that the cumulative excess return of TELLUS Group on the event day is significantly higher than the market return,which has a significant short-term market effect.Finally,using the financial index analysis method,DuPont comprehensive analysis and economic value added analysis method,the paper compares and analyses the changes of financial performance before and after the implementation of private placement in TELLUS Group.The following conclusions are drawn: after the implementation of private placement,the asset quality of TELLUS Group has been significantly improved and the development potential of the enterprise has been enhanced;the short-term solvency of TELLUS Group has been improved,but it is lower than the average level of the industry,the long-term solvency has been significantly strengthened,and the financial risk has been mitigated;although the operational capacity has been greatly improved,it is generally lower than the average value of the same industry;The net profit growth rate is better than that of the same industry,but other indicators of development capacity are lower than the industry average.In the long run,the economic added value(EVA)after the implementation of private placement is better than the industry average.