Study On Equity Pledge Of Controlling Shareholders Of Huayou And Its Economic Consequences

As an effective and simple investment means,equity pledge is favored in the enterprise financing market.At present,it has become a common phenomenon to use equity pledge to obtain enterprise financing.Although equity pledge can effectively raise funds for listed companies,it is confronted with the risk of pledge,which will bring huge losses to listed companies and even the whole financing field.But also because the controlling shareholders occupy a dominant position for a long time,the economic consequences of their equity pledge behavior will not be ignored.This paper selects Huayou as a case company for analysis.First of all,it reviews relevant literatures of research scholars and introduces the theoretical basis and concepts involved in the paper.Secondly,the paper describes the development scale of equity pledge of listed companies in China at present,determines the case company from the perspective of industry characteristics,pledge ratio and pledged market value,and introduces the development history,equity structure and pledge profile of the case company,and analyzes the pledge motivation of controlling shareholders from the perspective of financial and operational needs.Then,using the event study method,comparative analysis method,financial index analysis method,liquidation warning line measurement,specific analysis of the controlling shareholder equity pledge period on the company’s short-term capital market response,business performance,financial status,liquidation risk caused by the impact.The main conclusions are as follows :(1)equity pledge can help enterprises relieve financial pressure and promote the transformation and development of enterprises.(2)During the equity pledge period,the financial risk is high and the profitability is weak,which affects the operation stability of the enterprise.(3)Frequent pledge of equity makes short-term market reaction negative,especially in industries with strong periodicity,stock price fluctuation will be more severe,easy to touch the risk of liquidation.If the capital market is in the downward trend,enterprises may be in trouble,affecting the stability of control of controlling shareholders.Finally,in view of the problems existing in the case of Equity pledge of Huayou,suggestions are put forward from the company,external supervision and investors,in order to maximize the positive effects of equity pledge,avoid potential risks,and promote the stable and orderly development of listed companies and capital market in China.