Research On Cross-listing Motivation And Performance Of CRSC By Hong Kong Stock Market To STAR Market

In the early days,the development of China’s capital market started late and it was difficult for enterprises to go public with high threshold,which led to a large number of domestic science and technology enterprises choosing to go public outside China.But now,relying on national promotion and social support,the domestic capital market has flourished and gradually formed a diversified and multi-level capital market structure.Among them,the STAR Market,known as China’s version of "NASDAQ",has been officially opened in 2019,and is positioned to serve "hard-tech" science and technology enterprises that implement national strategies,possess key core technologies and have high market recognition.Therefore,the board has been attracting a large number of science and technology companies that meet the criteria for listing and issuance,including some companies that have been listed overseas and have chosen to cross-list back to the board.From the pattern of cross-listing from overseas capital markets to domestic capital markets,we can find that it has become a trend for companies to cross-list by adopting the path of H-share to A-share on the board.However,through the existing literature,we found that the research method focusing on cross-listing is generally a large sample empirical study,and there are few case studies on cross-listing of a single enterprise,and the main subjects of domestic and foreign cross-listing research are European,American and Chinese capital markets,and there is a lack of research on cross-listing of "A+H" style.In addition,the cross-listing research on "H+ STAR Market " is even more scarce because of the short time of the launch of STAR Market.Therefore,the study on the motivation and performance of individual enterprises’ Hong Kong Stock Market return to STAR Market to achieve cross-listing can highlight certain theoretical and practical significance,and bring reference significance and value to relevant parties.Based on the above research background and significance,this paper takes CRSC,the first central enterprise and the first "A+H" share enterprise to be listed on the board,as the main subject of the study,and attempts to analyze the performance changes of the cross-listing from two perspectives: market performance and financial performance through the event study method,BHAR method,financial index method and factor analysis method.The study attempts to present the entire cross-listing process,motivation and performance changes of the case companies,analyze the causes and consequences of the cross-listing in series,draw conclusions and make relevant recommendations.This paper is divided into six parts.The first part introduces the background and significance of the study,the current status of relevant domestic and international research,the content and methodology of the study,and the innovation and shortcomings of the study.The second part introduces the concept,model and mode of crosslisting,as well as the relevant theories required for the study,so as to consolidate the theoretical foundation for the later analysis.The third part introduces the overview of CRSC and the process of cross-listing.The fourth part analyzes the motivation of CRSC’s cross-listing from three levels: financing,market performance and strategic drive.The fifth part analyzes the cross-listing performance of CRSC,analyzes the market performance through event study method,analyzes the financial performance through financial indicator method and factor analysis method,and makes a summary.The sixth part includes the research conclusions and recommendations,summarizing and elaborating on the research findings,while attempting to make recommendations to CRSC,the proposed cross-listing companies returning to the STAR Market,regulators,and STAR Market investors.This paper finds that:(1)The motivation of CRSC ’s cross-listing includes not only improving corporate valuation,expanding corporate awareness,meeting financing needs and reducing financing costs,but also deepening corporate strategy and fitting the positioning of the science and technology innovation board at the strategic-driven level;(2)After CRSC achieves cross-listing,the short-term market reaction is positive,while the long-term market reaction is negative,and to a greater extent in the early stage of cross-listing The positive response is not obvious in the middle term due to the lack of market confidence caused by factors such as the epidemic;(3)The cross-listing of CRSC has significantly improved the financial performance in the short term,it has improved the corporate development capabilities such as debt servicing,growth and operation,especially the performance evaluation indicators such as current ratio,quick ratio,net profit growth rate and inventory turnover ratio,but the effect is not significant in the long term.At the same time,it was found that CRSC has certain problems in profitability and analyzed the causes of its problems;(4)From the combined market performance and financial performance,the return to the STAR Market to achieve cross-listing fulfills the cross-listing motive expectation of CRSC of financing,market performance and strategic drive.,which is beneficial to the development of CRSC.Finally,this paper suggests that CRSC should improve its profitability and enhance its core competitiveness;the proposed returnees should avoid short-sighted behavior and correct their cross-listing motives;the regulators should refine the system and optimize the process of returning Hong Kong Stock Market to the STAR Market;and investors in the STAR Market should avoid speculative behavior and strengthen the concept of value investment.Through this paper,we expect to enrich the literature on the cross-listing of "A+H" and provide references for the cross-listed companies that intend to return Hong Kong Stock Market to STAR Market.