The Analysis On The Motivations,Paths And Market Reaction Of CRM’s IPO On STAR Board0

For a long time,the road to domestic listing of red chip companies has been quite bumpy.The red chip structure,which was built to facilitate overseas listing,has become the biggest obstacle for red chip companies to list in China.Until the issue of “Notice of the General Office of the State Council on Forwarding the Several Opinions of the China Securities Regulatory Commission on Launching the Pilot Program of Innovative Enterprises Domestically Issuing Stocks or Depository Receipts” in 2018,finally clears policy hurdles for red-chip companies.The launching of the STAR Board in 2019,which will implement the registration system,is the last piece of the puzzle for red-chip companies to be listed in China.From the traditional "dismantle red chip structure-privatization-listing" to direct IPO,the convenience of domestic listing is attracting overseas red chip companies to return.CRM,a red chip company once listed on the Hong Kong Stock Exchange,has been waiting to return to the capital market after its delisting in 2011.After two rounds of inquiries,it was successfully listed on the board on February 27,2020,becoming the first red chip stock in A share.The successful listing of CRM on the STAR Board means that the policy restrictions that once plagued many red-chip companies have been liberalized,which is undoubtedly of great historical significance to many red-chip companies.This thesis selects CRM as the research sample,and analyzes its motivation for choosing the STAR Board to list,its listing path,and the market reactions after the listing,it is intended to provide a reference for other red-chip companies to land on the STAR board.At the same time,it enriches the existing research related to red-chip companies.The thesis is written in six parts using research methods such as literature study,case study and comparative analysis.The first part is the introduction,including the background and significance of the thesis,literature review,and the research ideas,methodology and basic framework of the thesis.The second part is the relative theories,which introduces the concepts of red-chip enterprises and STAR Board,lists the motivations for enterprises to choose STAR Board for listing from both internal and external perspectives,and elaborates the theories related to the listing of enterprises.The third part is a case introduction,including the overview of CRM and its listing history.The fourth part is a motivation analysis,which analyzes the motivation of CRM to choose to list on the STAR Board from both internal and external perspectives.The fifth part explores the rationality of CRM’s choice of overall listing as its path to listing on the STAR Board,followed by an analysis of the market reaction after CRM’s listing.The sixth part is the research conclusion and insight.This thesis believes that,CRM chooses to list directly on the STAR Board as an IPO instead of listing on the Main board or Second-board like traditional red-chip companies by "dismantle red chip structure-privatization-listing",mainly because: CRM belongs to the semiconductor industry and fits the positioning of the STAR Board;the STAR Board allows direct listing of red-chip companies;the average P/E ratio of the STAR Board is higher;CRM’s shareholding structure is more suitable for IPO as a whole.After analyzing the market reaction of CRM after its listing,it can be found that CRM’s market reaction at the initial stage of listing was not satisfactory,but in the long run,the market still found CRM’s performance potential and resulted to good market reaction,indicating that its choice of listing on the STAR Board has achieved the expected results.After analyzing the case,this thesis draws the following conclusions: firstly,CRM’s listing on the STAR Board broadens the original single financing channel;secondly,CRM’s listing on the STAR Board achieves a higher corporate valuation;finally,CRM’s listing on the STAR Board has a poor short-term market response but a good long-term market response.At the same time,insights for other red-chip companies were obtained from the analysis:firstly,red-chip companies can consider returning to domestic listing to ease their financing pressure;secondly,red-chip companies should pay close attention to policy changes when formulating their listing plans;finally,red-chip companies should choose their own listing paths in light of their actual conditions.