Research On The Motivation And Economic Consequences Of SMIC’s Dual Listing

In recent years,bilateral opening process of China’s capital market has been increasingly promoted.A series of institutional reforms,such as the establishment of the Science and Technology Innovation Board and the expansion of connectivity between Hong Kong and the mainland,have provided the environment and conditions for red chip enterprises to achieve “A+H” dual listing.In addition to the promotion of favorable domestic policies,dual listing has become the choice for more and more red chip enterprises to return to A-shares because it does not affect the listing status of the original market,is conducive to expanding the investor base,and improves stock liquidity and valuation.However,there are still a few successful cases of returning to A-shares to achieve dual listing.Therefore,it is of certain significance to deeply analyze the issues related to dual listing of red chip enterprises.It can not only enrich the research on dual listing,but also provide practical reference for red chip enterprises and domestic regulators.Semiconductor Manufacturing International Corporation(hereinafter referred to as “SMIC”)is the first “A+H” dual listed red chip enterprise on the Science and Technology Innovation Board,which is very typical.Based on this,this article takes SMIC as an example to study its dual listing motivations and economic consequences.This paper first combs the relevant literature and forms the research content,methods and framework of this paper.Secondly,briefly define relevant concepts and clarify the mechanism of the economic consequences of dual listing.Then,analyze the external motivation of SMIC’s dual listing from the aspects of policy environment,valuation environment and industry environment,and analyze the internal motivation from the aspects of financing demand,valuation demand,strategic choice,etc.Thirdly,it studies the economic consequences of SMIC’s dual listing from the aspects of market performance,financial performance and innovation performance.In the aspect of market performance,it uses the event research method to explore the market reaction of SMIC’s dual listing,and uses the comparative analysis method to analyze its market valuation and stock liquidity changes;In terms of financial performance,it is analyzed from four dimensions: profitability,safety,growth and turnover,and its comprehensive financial performance is evaluated by factor analysis method;In terms of innovation performance,we analyze it from three dimensions: innovation input,innovation output and innovation support,and use entropy method to evaluate its comprehensive innovation performance.Lastly,Form the research conclusions and suggestions of this paper.The research results show that SMIC has chosen dual listing based on such external motivations as domestic market policy is better than the U.S.market,domestic market valuation is higher than the overseas market,domestic industry environment is better than overseas,as well as internal motivations such as expanding financing scale,obtaining high valuation,and development strategy selection.The realization of dual listing has significant short-term market response on the A-share market and Hong Kong stock market;After dual listing,the stock prices of both Ashare and Hong Kong stock markets rose,the P/E ratio of A-share market rose briefly,and the P/E ratio of Hong Kong stock market declined;Profitability,security and growth have improved to varying degrees,turnover has decreased,and comprehensive financial performance has improved;The innovation output is improved,but the innovation input is reduced and the innovation support is limited,resulting in the decline of the comprehensive innovation performance.Based on the above conclusions,this paper proposes that SMIC should be alert to the market valuation foam and enhance the actual value;Improve the layout of external financing and the capital structure;Adjust the capacity allocation strategy and increase foreign investment;Increase investment in innovation to prevent brain drain.