The Process And Valuation Analysis Of Chinese Concept Stocks Returning To A-Share Market

Chinese concept stocks(hereinafter referred to as "Chinese stocks")companies refer to stocks that are listed in other markets in China.Due to the scarcity of IPO listing windows in the Chinese stock market every year,many companies choose to list and raise funds in foreign markets.In 2011,a short wave of Chinese stocks was set off in the U.S.market.Most of Chinese stocks were hunted and the stock price dived collectively.Under such circumstances,the market value of Chinese stocks was generally low,and privatization was delisted and returned to A shares The market may be a better choice.The research objective of this article is to take Focus Media as an example,and compare its valuation when it delisted in the United States and when it returned to the A-share market to verify whether Focus Media has a low valuation in the United States and whether it is a good choice to return to the A-share market;In addition,a detailed description of the return process of Focus Media deepens readers' in-depth understanding of the return of China Stocks.The research content of this article first introduces the main business of Focus Media,and then describes in detail the establishment of Focus Media in 2003,the establishment of the VIE structure,the privatization and delisting in 2013,the demolition of the VIE structure in 2015,and the backdoor Hexi Holdings listed on the A-share market.History.This article is based on the establishment of a three-tier entity consisting of Focus Media Holding Limited(hereinafter referred to as FMHL),Focus Media(China)Holding Limited(hereinafter referred to as FMCH)and Focus Media(Focus Media is a subsidiary of FMCH,and FMCH is a Subsidiaries)introduced the establishment and dismantling of the VIE structure,the privatization and delisting,the two equity transfers(the second equity transfer was to dismantle the VIE structure),and the process of backdoor listing for the timeline,and then studied the other four backdoor The operations of the Chinese stock companies returning to A shares(Perfect World,Giant Network,Tongjitang,360,etc.)compared and compared the similarities and differences and risk aversion between five companies including Focus Media,and summarized the reasons.The main research method of this article is to combine case valuation with case analysis to give readers a comprehensive understanding of the case.Valuation methods and valuation models are needed to value companies.This article introduces the two methods of absolute valuation and relative valuation,and details the company's free cash flow in absolute valuation.Definition(FCFF)and equity free cash flow model(FCFE),economic meaning,calculation formula,variable selection,etc.After the valuation method is determined,the FCFF model is selected based on the matching degree of the valuation model to evaluate the results of Focus Media when the US delists and returns to A shares.Most of the data required for the model comes from listed companies.Annual reports,Wind database and Bloomberg database.Subsequently,a scenario analysis was conducted to objectively estimate the valuation range of Focus Media.Finally,the comparison between the market value before and after delisting and the return verified the fact that Focus Media was undervalued in the US market and overvalued after the return.The reasons for Focus Media's privatization and delisting and its listing on the A-share market are likely to be its market value being troughed in the US market and better development in the A-share market.The practical significance of the research in this article lies in firstly perfecting the case study of Chinese stocks seeking overseas listing,privatization,delisting,and backto-back return to the A-share market,and a detailed description of its operation process for other Chinese stocks companies to learn from;The valuation and scenario analysis of Focus Media verified the motivation for Focus Media to seek privatization and delisting due to the low valuation in the United States,and supplemented the research on China stocks delisting from a valuation perspective.Innovation points: This article's operating valuation model verifies the reasons for the delisting and return of Focus Media's privatization.It analyzes the valuation range of Focus Media through scenario analysis,and makes a more reasonable judgment as to whether its market value is overvalued or undervalued.For the timeline,a more clear and thorough analysis of the history of Focus Media from its listing to its return.