Analysis On The Effect Of Introducing State-owned Investors By Private Enterprises

Beginning with the third Plenary Session of the eighteen CPC Central Committee,we proposed to actively develop the mixed ownership economy,in 2015,the State Council in the opinions of state enterprises develop mixed-ownership economy for the first time "encourage state enterprises through investments,combined investments,mergers,acquisitions and reorganizations in various ways,with the integration of equity,cooperating strategically and integrating resources into non-state enterprises strategic cooperation and resource integration into non-state enterprises" the connotation of mixed ownership has been continually enriched and extended.Not only does it refer to the introduction of private capital by state-owned enterprises for the purpose of mixed reform,but also in recent years,because of the great downward pressure on the economy as a whole,some private companies have faced difficulties in their development.When enterprises have capital shortage,technology backwardness and other problems,they began to introduce state-owned capital.The result is generally in two kinds,one is more state-owned capital needs to be introduced to form state-owned portfolio companies;another is to introduce less state capital,which is always a private capital holding company.The former may lead to state-owned enterprises to take this opportunity to merge private enterprises,the phenomenon of "the state advances and the private retreat",while the latter may lead to enterprises unable to obtain more resources,which is not conducive to sustainable development.The introduction of CSD Water Service into Yangtze River Environmental Protection Group belongs to a strong alliance,strategic cooperation to promote the long-term development of enterprises.In this thesis,we choose the case of CSD Water Service to investigate the motivation and effect of the private firm model for introducing state-owned capital,which is of great importance for solving the difficulties faced by private firms in the mixed-ownership reform process and for complementing research in the area of mixed-ownership reform.The Private Enterprise introducing State Capital is a special form of joint-stock system,and also an economic form of joint production and management.On the basis of Entrusted Agent Theory,Corporate Governance Theory,and Synergistic Effect,it mainly adopts equity transfer,capital increase,introduction of preferred shares,etc.,to improve the governance structure of private enterprises,enhance the operational efficiency and standardized management level of enterprises,and improve market competitiveness while promoting the common development of all types of ownership economies.This thesis analyses the case of the introduction of the Yangtze River Environmental Protection Group into CSD Water Service using both literature research and case study methods.By presenting an overview of the two companies and the process of introducing state-owned capital,the agents and ways of introducing Yangtze River Environmental Protection Group are expounded.Then,combining theoretical foundations the effect of introducing state-owned capital is analyzed from four aspects of corporate governance level,short-term market performance,financial effect and business performance.In general,the introduction of CSD Water Service into Yangtze River Environmental Protection Group has brought a positive impact on the company’s share price in the short term,improving corporate governance and financial position,enhancing the company’s innovation capabilities and opening up business markets for corporate development,and develops the business market to promote the development of the enterprise.Based on the above analysis results,this thesis concludes the vice chairman: the company maintains the right of the state-owned capital to form a check and balance mechanism;the company can increase the economic benefits of the enterprise.The thesis concludes with a summary of the results of the case analysis,from which the following four conclusions can be drawn: firstly,the non-public offering of shares by CSD Water Service to Yangtze River Environmental Protection Group is equity financing,which assists the firm in optimizing the capital structure and relieving working capital pressure;secondly,the new vice chairman of CSD Water Service is nominated by Yangtze River Environmental Protection Group,and half of the company’s non-independent directors are also nominated by Yangtze River Environmental Protection Group,these directors have rich industry experience,which is conducive to improving the level of corporate governance;thirdly,the chairman of the company supervisory board nominated by Yangtze River Environmental Protection Group can form constraints and play a supervisory role;fourthly,CSD Water Service and Yangtze River Environmental Protection Group jointly participated in the investment in Agricultural Environmental Protection Company,which promoted business strategic cooperation and helped both parties to do their best to help enterprises maximize benefits.From this thesis also got some key enlightenment for the introduction of state-owned capital into other private enterprises in the future: firstly,the voice of state-owned directors should be maintained after the mixed reform of private enterprises to form a coordinated and balanced governance structure;secondly,the participation of state-owned capital in the supervisory board should be encouraged after the mixed reform of private enterprises to effectively bring into playing the supervisory board’s monitoring effect;thirdly,private companies should choose the appropriate path to introduce state capital based on their own terms;fourthly,private enterprises should take into account the advantages of the resources of different capitals to achieve complementary advantages after the hybrid reform;fifthly,private enterprises should actively play the role of state-owned enterprises in the business strategy of the enterprise after the hybrid reform to promote the development of the enterprise.