The Impact Of The Return Of Chinese Concept Stocks On Corporate Financing

The development of Chinese capital market is relatively late.At the early stage of development,Chinese capital market system is not very perfect.In addition,the capital market access threshold is high.In this context,some enterprises with good development prospects are difficult to meet the listing requirements,while overseas capital markets are relatively inclusive and have relatively strong financial strength.These enterprises enter overseas capital markets,they are referred to as Chinese concept stocks.Initially,these Chinese concept stocks obtained more financing and learned more advanced management concepts.In addition,these Chinese concept stocks created an international brand image and developed smoothly.However,the increasingly strict regulation of Chinese concept stocks in overseas capital markets has significantly increased the cost of maintaining the listing of Chinese concept stocks in the United States.In addition,the short selling of Chinese concept stocks by foreign short sellers in Shanghai has made it more difficult for Chinese concept stocks to finance in the United States.In recent years,domestic policies have been issued to promote the return of Chinese stock and the capital market has gradually improved.Therefore,some Chinese concept stocks have begun to return to the domestic capital market for listing,hoping to improve their financing capabilities.As the first company to retain the red chip structure and return to the A-share scientific and technological innovation board,SMIC has returned to the market with high efficiency,becoming the largest IPO in the history of the scientific and technological innovation board.This thesis will adopt the literature research method and the case study method,taking SMIC as the research object of the return of Chinese stock to the domestic capital market.This thesis will analyze the motivation,path and impact on corporate financing of its return,providing corresponding reference and reference for the return of Chinese stocks.First of all,the thesis outlines the background and significance of this topic,summarizing the motivation,path and impact on corporate financing of the stock return in China through reading and sorting out the literature and lays a theoretical foundation for the analysis of this case.Secondly,on the basis of introducing the basic situation of SMIC and the general situation of its domestic and foreign listings,this thesis analyzes in detail the reasons for SMIC’s return to A-share listing,and concludes the following four reasons: firstly,domestic policies conducive to the return have been introduced;secondly,respond to US sanctions to promote the development of domestic chips;thirdly,enterprises need financing to promote R&D and business expansion;fourthly,in the US stock market,the value of enterprises is underestimated.SMIC first delisted on the New York Stock Exchange and then listed on the Science and Technology Innovation Board as an IPO.Then,based on the motivation and path of the return to listing,this thesis studies the impact of SMIC’s return to listing on corporate financing constraints,financing structure,financing costs,and financing risks.The study found that after the return of SMIC to the market,it reduced the information asymmetry with investors to increase the cash flow of its financing channels,achieved good financing effects to increase the available monetary funds of the enterprise,thereby easing the financing constraints.After the return of SMIC to list,it has obtained a large amount of equity financing,improving the shareholder equity ratio;The proportion of non current liabilities in total liabilities has been increased,reducing the pressure on short-term debt repayment;The interest bearing asset liability ratio has been reduced and the financing structure has been optimized.The return of SMIC to listing can reduce issuance costs and listing maintenance costs,thereby reducing the financing costs of enterprises.SMIC’s return to list has resulted in a significant increase in equity financing,assets,revenue,and profits,improving its solvency and Z-value levels,reducing the risk of financing and reducing the risk of being shorted by overseas institutions.Finally,through analyzing the case of SMIC’s return to A-shares,this thesis draws the following conclusions:(1)The return of SMIC shares is conducive to easing financing constraints;(2)The return of Chinese stock can optimize the financing structure;(3)Choosing a reasonable path of regression can reduce financing costs;(4)The return of Chinese stock can reduce financing risks.At the same time,this thesis summarizes the implications for Chinese concept stocks and relevant institutions:(1)Chinese concept stocks that want to return should pay close attention to changes in domestic and foreign policies;(2)Chinese concept stocks need to choose a regression path based on their own reality;(3)China stock market should make good use of regression to improve the financing ability of enterprises;(4)Relevant institutions should improve the system and strengthen supervision.