The Research On The Effect Of Double Equity Structure On The Performance Of Listed Companies

With the transformation of China's economy from high-speed growth to high-quality stage,China's Internet technology enterprises driven by technology,capital and information have developed rapidly.However,Internet technology enterprises in the early stage of a large number of equity financing,resulting in the concentration of equity is generally low,the shares of the founder of the company are gradually diluted.Under the background of "the same share and the same right",the founders are likely to lose control of the enterprise.The dual equity structure is an important means to solve the contradiction between the dilution of control and equity financing.Before 2,018,both the Hongkong capital market and the mainland capital market only followed the traditional principle of "one share,one right".Therefore,many high-quality Internet technology enterprises adopting the two-tier equity structure in China can only go overseas to seek listing.For example,China's Jingdong,Alibaba and other well-known Internet companies are listed in the United States,which leads to the domestic capital market missing a large number of high-quality Internet technology companies.In order to enhance the strength of the domestic capital market and avoid the outflow of resources from high-quality and innovative enterprises,China's capital market began to try to adjust the listing rules.In 2018,the Hongkong stock exchange amended the listing rules to allow companies with "different rights of the same share" to be listed in Hong Kong.In addition,the State Council,the CSRC and the stock exchange in the mainland have successively issued a series of documents encouraging enterprises to list on the science and Technology Innovation Board with "different rights of the same share".Against this background,on 9 July 2,018,Xiaomi company successfully landed in the main board market of Hongkong,becoming the first company listed in Hongkong with "same share and different rights".In view of this,this paper selects Xiaomi company as a case study to explore the specific design of the two-tier equity structure and its performance impact.This paper mainly studies the motivation,specific structure and the impact on the performance of Xiaomi company's adoption of the two-tier equity structure.The research idea is to firstly introduce the general situation and development process of Xiaomi company,then analyze the financing process of Xiaomi company and the realization of the founder's control,and finally explore the impact of the two-tier equity structure on the performance of Xiaomi company.This paper focuses on the analysis of the motivation of Xiaomi company to adopt the two-tier equity structure and the impact on performance.The case study shows that there are 3 reasons for Xiaomi group to adopt the two-tier equity structure: first,to meet the financing needs;second,to ensure the control of the founding team over the company and to ensure the implementation of long-term strategies;third,to enlarge the ability of the founder team and "Star" the founder to nurture the corporate image.In terms of the impact of the two-tier equity structure on the performance of Xiaomi group,by comparing the enterprises with the same share and the same right in the same industry and the enterprises with the two-tier equity in different industries,it is found that the two-tier equity structure has a positive impact on Xiaomi in the short term,and the performance also maintains a leading position in the same industry,but in the long term,the enterprise value will tend to be consistent with the same industry.Finally,through the summary of this case study,the paper puts forward relevant suggestions and inspiration,hoping to provide theoretical reference for the optimization of the two-tier equity system of Xiaomi company,the equity system design of scientific and technological innovation enterprises in China and relevant regulatory authorities.