Research On The Motivation And Effect Of Meituan Dianping On Setting Up Dual Class Share Structure

In recent years,with the rapid development of China's economy,there has been an upsurge of entrepreneurship all over the country.In the early stage of entrepreneurship,the founder team often has to introduce more investors because of its limited capital strength.Resulting in dilution of equity,which leads to the competition for control power.In this case,the dual class structure,which has been widely used overseas,has gradually come into our vision.In March 2018,China issued Several Opinions On The Pilot Of Domestic Issuance Of Shares Or Depository Receipts By Innovative Enterprises,which cleared legal concerns for the establishment of dual class structure listing for science and technology enterprises,and the public's discussion on dual class structure began to heat up.In April of the same year,HKEX finally issued new rules for the reform of the listing system of new industrial companies through a large number of previous researches and analysis,explicitly allowing companies with dual class structure to list in HKEX.In June 2018,Meituan Dianping submitted the prospectus for IPO to HKEX.The prospectus indicates that the equity will adopt the dual class structure,and it will be listed successfully in September of the same year.It has successfully landed in the HKEX,becoming the second company to use the structure to be listed successfully after Xiaomi,which also quickly sets off the upsurge of discussion on the dual class structure in China.In order to explore further the motivation and effect of Meituan Dianping on the choice of the dual class structure,the author chooses literature research,case analysis,comparative analysis and event research as the main research methods,and conducts multi-level and multi angle research.First of all,based on the literature research,this paper expounds the related concepts of dual class structure,and introduces the principal-agent theory,information asymmetry theory and incomplete contract theory to consolidate the theoretical basis.Secondly,this paper selects the dual class structure used by Meituan Dianping in listing in HKEX as the specific object of casestudy.Through the overview of Meituan Dianping,the development process and the changes of equity structure before and after listing,we have a preliminary understanding of Meituan Dianping,and an in-depth analysis of the characteristics of the dual class structure set up by Meituan Dianping in listing,so as to make a good development for the detailed exploration of the dual class structure of Meituan Dianping.Through the foreshadowing of the above series,this paper chooses to start from the motivation,to deeply explore the effect of the dual class structure,and then dig out the advantages and disadvantages of the dual class structure of Meituan Dianping.Finally,by the above analysis of Meituan Dianping on the dual class structure,we can provide experience and enlightenment for the comprehensive introduction of the dual class structure in China.This paper mainly draws the following conclusions: first,the dual class structure has realistic rationality;second,the dual class structure has a positive effect on the development of the company;third,the dual class structure is not perfect and needs to be further improved.At present,China attempts to relax the restrictions of dual class structure listing through science and technology innovation board,and the discussion of dual class structure will also become the focus of public discussion.This paper will also provide some suggestions and enlightenment for China to fully introduce dual class structure in the future.