Motivation And Effect Of Domestic Listing Of Red-chip Enterprises

In the 1990s,with the development of Internet industry,a group of Internet enterprises in the initial stage of development lack of funds appeared in our country.At that time,the domestic capital market was strict in the approval of enterprises’ listing and financing,and most Internet enterprises could not meet the requirements for listing.In order to meet their development capital needs,they chose to build a red-chip structure in various ways and go overseas for listing.With the increasing instability of the world economic situation,the return of red-chip enterprises to domestic listing has become a trend.However,since the companies listed in China at that time had to be registered in China,the red-chip structure for overseas listing became the biggest obstacle to domestic listing.Until March 2018,the Notice of The General Office of the State Council Forwarding the Opinions of China Securities Regulatory Commission on Carrying out the Pilot Program of Domestic Issuance of shares or Depositary Receipts by Innovative Enterprises was released,which clearly stated that "pilot red-chip enterprises are allowed to issue depositary receipts to be listed in the domestic capital market in accordance with procedures;Pilot red-chip enterprises that meet the requirements for stock issuance and listing can apply for listing in China ",making it possible for red-chip enterprises to list in China without dismantling the red-chip structure.In June 2019,the Science and Technology Innovation Board was officially opened,which provided a foundation for the domestic listing of red-chip enterprises.A number of red-chip enterprises successively applied for domestic listing.As the first red-chip enterprise to be listed in China,China Resources Micro’s listing in China is of landmark significance.It is the first company to be listed in the form of limited liability company,the first company to issue shares in Hong Kong dollar denomination-denominated currency,and the first company to use "green shoe mechanism" in the Science and Innovation Board.It fully reflects the inclusiveness,pioneering and breakthrough of the domestic capital market for the domestic listing of red chip enterprises.This thesis will take the domestic listing of China Resources Micro as the research object,analyze the motivation and implementation path for China Resources Micro to choose domestic listing,and conduct performance analysis and effect evaluation on China Resources Micro domestic listing from quantitative and non-quantitative perspectives,so as to draw the research conclusions of this thesis,and provide reference suggestions for other red-chip enterprises to go public in China and improve the system of domestic capital market.Taking China Resources Micro as the research object,this thesis can be divided into six chapters.The first chapter is used to introduce the main body,explain the research background and significance of the domestic listing of red chip enterprises,and sort out the relevant literature and the framework of this thesis.The second chapter is the theoretical overview,which explains the relevant concepts of red chip enterprises,expounds the main motivation and alternative ways of red chip enterprises to go public in China from the theoretical listing,and then states the theoretical basis of this thesis.The third chapter introduces the policy system and development status of domestic direct listing of red chip enterprises,as well as the background and domestic listing process of China Resources Micro.The fourth chapter firstly analyzes the reasons for China Resources Micro’s domestic listing.The reason for China Resources Micro’s domestic listing is the support of the domestic capital market financing policy,hoping to improve the company’s listing valuation.Finally,it is to meet the needs of the company’s long-term development strategy.Then it summarizes the implementation path of China Resources Micro domestic listing from the aspects of strengthening R&D investment,perfecting development war and improving governance structure.The fifth chapter is the effect evaluation part,the performance analysis and effect evaluation of China Resources Micro domestic listing.By analyzing the cases of China Resources Micro’s domestic listing,this thesis mainly draws the following conclusions: First,domestic direct listing is beneficial to the long-term development of China Resources Micro;Secondly,the innovative system design removes the institutional obstacles for the return of red-chip enterprises like China Resources Micro;Third,the domestic listing of red chip enterprises still needs more detailed and perfect system guarantee.On this basis,this thesis draws the following research enlightenment: First,red chip enterprises need to rationally choose whether to go public,the path of going public and the place of going public based on the characteristics of the company and the market conditions;Secondly,the domestic capital market needs to improve the cross-border governance system of red chip enterprises to ensure the interests of small and medium-sized investors.Finally,the domestic capital market should continue to promote the domestic listing of red-chip enterprises,and continuously improve the competitiveness of the domestic capital market.