Research On The Financing Effect Of Oriental Yuhong Convertible Bond

Capital is an important driving force for the sustainable development of enterprises,the survival and development of enterprises can not be separated from adequate and matching funds.Enterprises should combine their own conditions and external environment when they choose financing methods.Financing includes equity financing and debt financing.Through equity financing,enterprises can not only obtain long-term and stable funds,but also reduce financial risks and no debt repayment pressure.But equity financing will have a certain impact on the ownership structure,may make the transfer of corporate control.Debt financing will not have an impact on ownership structure,but will bring pressure on enterprises to repay their debts.Convertible bonds have the characteristics of creditor’s right,stock right and option,which can avoid the shortcoming of the two financing methods mentioned above and obtain low cost financing.Compared with foreign countries,the history of convertible bonds in our country is short and the development speed is slow.However,with the gradual improvement of convertible bond market and its supporting system,more and more enterprises issue convertible bonds for financing.In particular,in 2017,the China Securities Regulatory Commission("CSRC")issued new rules on refinancing,restricting the financing of allotment of shares,additional issuance of shares and nonpublic issuance of shares,which in turn promoted the rapid development of China’s convertible bond market.In this context,this paper chooses Yuhong as a case study to study the financing effect after Yuhong issue.This article first introduces the research background and significance,collects and collects the domestic and foreign related literature on convertible bond financing,and then introduces the related concepts and theoretical basis of convertible bond.This paper finds that Oriental Yuhong not only effectively solves the capacity problem by issuing convertible bonds,but also optimizes the capital structure.The enlightenment of this case study to similar enterprises is that enterprises should carefully choose financing methods according to their own development strategies.When issuing convertible bonds,we should pay attention to the appropriate time and design the terms reasonably to improve the efficiency of using the raised funds.