Performance And Risk Analysis Of Luoxin Pharmaceutical’s Backdoor Return To A-shares

In recent years,influenced by changes in the international market environment and other factors,the stock price of H shares has been underestimated,leading to a decline in the financing efficiency of The capital market in Hong Kong,China.In order to achieve long-term development,many companies have chosen the path of privatization and delisting.At the same time,China’s mainland capital market is gradually becoming mature,more and more favored by high-quality companies,so returning to the mainland capital market will also become an important financing choice.As A well-known H-share pharmaceutical enterprise,Luoxin Pharmaceutical completed its privatization and delisting in June 2017,and successfully landed in a-share market through backdoor in May 2020,becoming the first h-share listed company to return to A-share after privatization.Therefore,this thesis takes the form of case study,selects Luoxin Pharmaceutical as the research object,and study the performance and risk of its backdoor return to A shares.Firstly,by reading about the backdoor listing of the relevant literature both at home and abroad,understand the backdoor listing of basic research,combined with the selected direction determine the ideas and framework of this article,again to rossing pharmaceutical backdoor east co is presented in this case,including the basic situation of both parties,and the process and characteristics of the shell before and after,in the process,SWOT method is used to analyze the motivation of the backdoor listing of Luoxin Pharmaceutical,explaining that the main motivation of Luoxin pharmaceutical backdoor listing is to expand financing channels.From a financial perspective,the reason for the shell sale of Dong yin shares lies in the gradual increase of debt pressure while profitability is also declining.Secondly,studied the backdoor listings for rossing pharmaceutical performance and risk,the influence of the performance level,considering from the perspective of both marketing and finance from the aspects of market performance analysis of backdoor listings,shares of observation and event study method,found that the market feedback is positive,a larger price increase during this period,And the cumulative excess return rate also has a good performance.In terms of financial performance,EVA index,profitability and debt repayment ability were analyzed,and it was found that AFTER the successful backdoor listing of Luoxin Pharmaceutical,EVA value maintained a good level,but the other three financial indicators declined in comparison with the average level of the industry.The risk level is analyzed from the three stages before and after the backdoor listing of Luoxin Pharmaceutical.Before the backdoor listing,Luoxin Pharmaceutical faced the risk of class action lawsuit of minority shareholders in the process of privatization,as well as the policy risk of drug price decline brought by policy changes.In the process of backdoor listing,there are mainly shell resource risks and insider trading risks.After the backdoor listing,due to the rapid changes of the two companies’ business model and market environment,the integration risk and the risk that the performance commitment can not be realized are generated.At the same time,the thesis analyzes the causes and preventive measures of various risks of backdoor listing.Finally,this thesis gets inspiration from the backdoor listing case of Luoxin Pharmaceutical,and gives corresponding reference suggestions for different market entities,hoping to enlighten the normative operation of the capital market.