Research On The Motivation And Performance Of Red Chip Enterprises Issuing CDR Listing

In recent years,under the background of tension between China and the United States,the market environment faced by China Concept Stocks in the United States is not optimistic.In addition,coupled with the exposure of some scandals such as information disclosure and financial fraud of China Concept Shares,China concept shares,which are not optimistic,have suffered more serious valuation discrimination.In the past few years,while US stocks have repeatedly reached new highs,China Concept Index has not improved.In May 2020,the U.S.Senate passed the foreign company Accountability Act,which involves nearly 90% of China’s shares.By the end of December 2021,the number of delisting shares in this year alone had reached 29,reaching an unprecedented number.At the same time,China’s capital market is also rising rapidly.In recent years,China has also promoted reform and formulated many policies that are good for overseas Chinese enterprises,creating favorable conditions for red chip enterprises to return to the domestic market.In March 2018,the document on innovative enterprises issuing depositary receipts for listing was born,providing a new listing channel for those red chip enterprises that have not yet made a profit,have a special ownership structure and a red chip structure.In October 2020,Ninebot Limited became the first red chip enterprise to issue Depositary Receipts(CDR)and officially listed on the science and innovation board.Its "CDR + VIE" approach also provides a new idea for the return of red chip enterprises.This paper takes the case of Ninebot Limited issuing CDR listed science and innovation board as the research object.Firstly,starting with the background of red chip enterprises issuing CDR,this paper briefly introduces the operating mechanism and conditions of CDR,and analyzes the motivation of red chip enterprises issuing CDR.Secondly,according to the characteristics of Ninebot Limited,this paper introduces the company profile,ownership structure and operation,leads to the overall process of issuing CDR,and provides background information for subsequent motivation analysis and research.Then,it analyzes the internal and external environment in which Ninebot Limited issues CDR.Through the research,it is found that the issue of CDR listing of Ninebot Limited is closely related to the difficulties of overseas listing,favorable policies in China,its own issuance conditions and strategic development needs.In the performance research,the event research method and factor analysis method are used to analyze the market performance and financial performance of Ninebot Limited before and after CDR listing;Then select four companies listed on the same type of science and innovation board for horizontal comparison to analyze the performance differences brought by CDR listing.Through research and analysis,Ninebot Limited has a good market response and excellent stock price performance after issuing CDR,and has achieved remarkable results in profitability and strategic development after listing,showing the advantages of CDR in the listing of red chip enterprises.Finally,for this study,this paper puts forward some suggestions from the level of red chip enterprises and CDR system,in the hope that CDR can standardize the development and benefit more red chip enterprises.