| Under the background of increasing energy demand and rapid consumption of coal and other fossil energy in China,the development and utilization of new energy are of great significance for ensuring national energy security and tackling climate change.The development of the new energy industry is inseparable from financial support.With the gradual fade of policy dividends,the importance of market-based financing methods has become increasingly prominent.From the perspective of capital market financing in developed countries,convertible bonds,as a financing tool with the characteristics of both bonds and stocks,can reduce the issuer’s financial pressure with lower coupon rates.Meanwhile,the design of equity transfer also gives investors the opportunity to enjoy the enterprises’ development dividends,which are mostly used in industries with high growth and high risks such as new energy.In addition,after the promulgation of the new refinancing regulations in 2017,China’s convertible bond market has ushered in rare development opportunities,and convertible bonds have favored by more and more investors and companies.In this context,this paper selects Linyang Energy as the research object,which aims to take Linyang Energy as a reference so as to verify the applicability of convertible bond financing for new energy enterprises.Thus,more references for new energy enterprises’ financing decision-making can be presented.In the beginning,this paper combs relevant literature on the financing of new energy enterprises,the motivation of convertible bond financing and the analysis of financing performance.Then it summarizes the financing situation of China’s new energy enterprises.Next,it illustrates the concept,characteristics and related theories of convertible bonds,and introduces the development process and current situation of our country’s convertible bond market.In addition,the case of Linyang Energy’s convertible bond financing is introduced to present the basic situation of Linyang Energy and Linyang Convertible Bond.On the basis of that,combined with the reality of Linyang Energy,this paper analyzes the reasons why Linyang chooses to finance by convertible bonds;at the same time,the event research method,financial indicator method and EVA analysis method are applied to focus on researching the issued convertible bonds financing performance from Linyang Energy.Finally,based on the analysis results,from aspects of new energy enterprises and supervision,relevant suggestions for new energy enterprises to finance by using convertible bonds are put forward.This paper finds that Linyang Energy chooses to use convertible bonds to finance for the following reasons.Firstly,it can meet the capital needs of business expansion.Secondly,the issuance of convertible bonds can optimize the enterprise’s capital structure.Thirdly,the financing cost of convertible bonds is relatively low.Fourthly,convertible bonds have the function to avoid the rapid dilution of equity and affect the enterprise’s valuation.The successful issuance of convertible bond has greatly eased Linyang Energy’s financial pressure,optimized the enterprise’s capital structure,driven the decrease of the enterprise’s long-term financing costs,and avoided the rapid dilution of the enterprise’s equity by equity financing.Convertible bond financing has enhanced Linyang Energy’s short-term debt solvency and profitability and promoted the improvement of Linyang Energy’s overall operating performance.It should be noted that Linyang Energy’s issuance of convertible bonds shows a negative announcement effect,which will be detrimental to the enterprise’s stock price in the short term.According to comprehensive case analysis,it is concluded that issuing convertible bonds by new energy enterprises is a sound option,while it may jeopardize stock price in a short term.Therefore,companies should raise the risk awareness so as to choose the issuing time cautiously in light of their own financial conditions. |
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