The Influence Of Dual-class Share Structure On The Value Of Xiaomi Group

In the capital market,more and more companies choose to list with a dual-class share structure.And most of them are high-tech companies represented by the Internet industry,which have aroused the attention and discussion of domestic and foreign scholars.In this way,this paper puts forward the research purpose: to clarify the influence of the dual-class share structure on the company value and performance.Through the case study method,this paper reviews the relevant literature on dual-class share structure and corporate value.Based on incomplete contract theory,shareholder heterogeneity theory,entrepreneurship theory and life cycle theory,the paper combines the case of Xiaomi Group,the first dual-class share structure company listed in Hong Kong,to analyze the research content.The paper elaborates on the rationality of high-tech companies' choice to introduce dual-class share structure,the influence of the dual-class share structure on the value of Xiaomi Group and its performance.Then the suggestions on corresponding potential problems are put forward.The research conclusion is that the dual-class share structure meets the different demands of the founders and other investors.It reflects the heterogeneous capital of the founders through special voting rights and makes the division of labor between the two types of shareholders more professional: the founder has residual control rights to perform the company's important decision-making functions;other small and medium investors have the right to claim residual and take risks while enjoying the dividends brought by the company's development.The dual-class share structure is conducive to stimulating the entrepreneurial spirit of the founders,stabilizing corporate governance sustainably,implementing cultural concepts sustainably and activating the company's innovative investment activities sustainably,then further acting on returns and risks to impact the corporate value.On the positive side,the dual-class share structure is favorable for enhancing the sustainability of the company's strategic direction,cultural concepts,and innovative decision-making.Above all,using the dual-shareholding structure sends a positive signal to the capital market,which is good for boosting investor confidence and increasing the company's market value.The founder's control could help maintain the company's development direction and improve the efficiency of decision-making.Secondly,it is propitious to the long-term implementation of corporate cultural concepts,expand its influence,enhance the brand image and customer stickiness for monetization.Finally,it is helpful for the founders to continue to make innovative investment decisions.Through continuous innovation of business models and diversified business synergy,the growth of corporate finance has been enhanced,the scale of the industrial chain has been continuously expanded,and operating costs have been reduced to achieve synergy and win-win results,thereby promoting the profitability.At the same time,through the continuous innovation of the underlying technology,the company frequently launches and upgrades new product,increases the global market share,and forms innovative scarce resources within the company,increases the core competitive advantage in the industry,and thereby elevates the corporate value.On the negative side,the application of dual-class share structure is dependent on the founder's ability.And there are risks of the matching of the founder's ability with the development characteristics of the company and the failure of the company's internal and external supervision which will lead to increase the agency costs.These potential problems would result in the risk of reducing the company's value.Therefore,it is recommended to introduce sunset clauses and other relevant laws and optimize the structure by imitating the partner mechanism beforehand.during the event,companies should strengthen the information disclosure and supervision mechanism.The after-event relief mechanism also needs to be improved.As a result,the company could seek advantages and avoid disadvantages so that it can give full play to the positive impact of the dual-class share structure on the corporate value.The novelty of this paper is that it enriches the relevant research the dual-class share structure's impact on the corporate value and makes a supporting analysis in the form of a single case.The aim is to provide companies that plan to list on the sci-tech innovation board in the future by dual-class share structure with certain theoretical reference and practical suggestions.