The Motivation And Economic Effect Of Private Placement To Introduce Strategic Investors

The full implementation of the registration system will promote the multi-level development of China’s capital market.As more and more companies enter the securities market,the demand for refinancing is also on the rise.Among the refinancing methods such as rights offering,private placement and issuance of convertible bonds,private placement has become a popular choice for many listed companies by virtue of its advantages such as low threshold,low cost and simple application process.Among them,the introduction of strategic investor type private placement can not only supplement the working capital,but also have the opportunity to complement the advantages of strategic investors and realize the coordination of management,finance and other aspects.After the introduction of the new regulations on refinancing on February 14,2020,the plan to introduce strategic investors through private placement has mushroomed,but only a few cases have passed the review of the CSRC,and Lead Intelligence is one of them.Therefore,this paper will take Lead Intelligence as an example to study the motivation and economic effect of introducing strategic investors into the private placement of listed companies,focusing on providing reference for related enterprises in the new energy industry chain.The core problem of this paper is that,firstly,it discusses whether CATL meets the requirements of strategic investors from the perspective of regulators and the strategic investors,then clarifies the elements that strategic investors should have.Secondly,it analyzes the motivation of introducing strategic investors with leading intelligence from the perspective of synergistic effect.Finally,stock price,corporate financial performance index and EVA analysis are used to evaluate the economic effect of introducing strategic investors.To solve the above problems,the conclusions of this paper are as follows:First,in terms of regulation and nature.CATL meets the requirements of strategic investors.In addition to meeting the regulatory conditions of "industry-related+long-term holding+participation in governance",strategic investors also need to complement the resources of the invested enterprises and have advanced management experience,technology and leading industry status.Second,enterprises often hope to introduce strategic investors when facing transformation and project investment,so as to achieve industrial chain synergy,management synergy and technological innovation synergy.Third,in terms of stock price effect,when the private placement plan contains different information,the company’s stock price will be affected differently.The introduction of industry quality companies as strategic investors will have a positive impact on market value.Fourthly,in terms of financial performance,the integration of the upstream and downstream industry chains is conducive to stabilizing the order sources of upstream enterprises,while the upstream and downstream innovation synergy effect is significant,which is conducive to improving the profitability of enterprises.However,a large backlog of short-term orders can easily lead to a decline in operating efficiency and debt paying ability.The company should be alert to the risk of bad debts of accounts receivable due to excessive concentration of orders.Based on these,this paper respectively puts forward the following suggestions for listed enterprises and regulators:As for listed companies,they should first pay attention to the selection of strategic investors when introducing them.They should select strategic investors that are compatible with their own development plans and strategies from the perspective of motivation.Secondly,enterprises should pay attention to the management of strategic resources and the implementation of strategic cooperation agreements,so that strategic investors can truly create value for listed companies.Finally,for enterprises in the new energy industry chain,the introduction of upstream and downstream related customers as strategic investors is conducive to the formation of industrial chain synergies.In terms of supervision,first,the regulatory authorities should further standardize the review system of introducing strategic investors into the private placement of listed companies.Second,small and medium-sized enterprises should be encouraged to introduce strong strategic investors through private placement to solve the development dilemma.Third,regulators need to strengthen the supervision of the cooperation between listed companies and strategic investors,and pay close attention to the use of raised funds and value creation.First,the method of case study is adopted,and typical representatives are selected for in-depth analysis.Based on the definition of strategic investors in the regulatory questions and answers after the new refinancing regulations,the selection and definition of strategic investors are deeply analyzed,which provides a reference for the choice of strategic investors in private placement.Secondly,through the selection of specific cases,a scheme system to introduce strategic investors is proposed to help realize the synergy of the new energy industry chain,to make transformation and to improve governance.Thirdly,in the economic effect,the paper separately analyzes the impact on the innovation ability of enterprises because of the introduction of strategic investors through private placement,which enriches the research perspective of economic effect.