Case Analysis Of Chaxing Asset Management Company Bail-out Truking

For a long time,compared with state-owned enterprises,private enterprises in China have more difficulty in financing.In addition,in recent years,Chinese policy orientation of "deleveraging","strong supervision" and "risk prevention" has made private enterprises more and more discriminated against in credit financing.In order to effectively meet the capital needs of enterprises,private enterprises have to find new financing methods,and equity pledge financing has become an important financing method for many private listed companies due to its high efficiency,flexibility and low cost.However,the high proportion of pledge is also accompanied by the risk of control transfer caused by liquidation.Since 2018,due to various internal and external factors,China’s stock market has experienced severe shocks and stock prices have fallen sharply.In order to prevent systemic financial risks caused by the concentration and batch outbreak of equity pledge risks,the central government and regulatory agencies decided in mid-October 2018 to collect funds from all walks of life through bail-out projects to solve the equity pledge problem of private enterprises.As a short-term rescue mechanism,bail-out undoubtedly has a certain policy inclination,and its main purpose is to help enterprises get rid of temporary liquidity risks by providing financial support and financing convenience to enterprises.But,the ultimate goal of the bail-out operation is make sure the private enterprises can achieve their own sustainable profitability and enhance their future industrial development capabilities finally.Therefore,the bail-out of private enterprises doesn’t mean to help enterprises completely shield risks,but to empower enterprises for their subsequent steady development through the action of bail-out.Therefore,how to use the bail-out action to get rid of the deadlock for private enterprises in trouble,how to safeguard the rights and interests of all stakeholders in the bail-out action,and how to introduce the economic development of private enterprises into a healthy and benign cycle after the bail-out all need in-depth discussion by people from all walks of life.This thesis comprehensively uses the literature research method,case analysis method and qualitative and quantitative research method,taking Chaxing Asset Management Company’s bailout of Truking as the case study object,and sorts out the whole process of Chaxing Asset Management Company’s bail-out of Truking and the effect of this bail-out,then probes into the motivation of the government as the bail-out party to choose the bail-out object and the considerations when finalizing the bail-out mode,and tries to find out the mechanism of the bail-out effect by combining the realistic basis and related theories,so as to provide a standard reference model for the government to bail-out private enterprises.Through the analysis of this case,it is found that this bailout action has achieved good results.On the one hand,the risk of equity pledge of the enterprise has been resolved,the profitability of the enterprise has been restored,and the operating ability of the enterprise has been enhanced;on the other hand,Chaxing Asset Management Company itself has also achieved investment return.Chaxing Asset Management Company selected the rescue targets based on the "three quality" enterprises,which not only helped Truking,the high-quality enterprise with distress,get rid of liquidity risks,but also met Chaxing Asset Management Company’s own diversified investment needs.In addition,a suitable bailout model can help the bailout action achieve the best effect.Chaxing Asset Management Company’s "debt & stock" bailout model not only realized the rescue of Chaxing Asset Management Company within the time limit,ensured the smooth progress of the bailout process,but also made Chaxing Asset Management Company obtain rich capital return in the secondary market.The success of this bailout can be attributed to the fact that Chaxing Asset Management Company did not seek corporate control,it still maintaining the status of the former controlling shareholder,and achieved equity balances as a heterogeneous major shareholder,fulfilling the supervisory function of Truking by sending non-executive directors,and helping enterprises to integrate resources with its strong power,to provid financial support and business support.Based on this case,the following inspirations can be drawn: government bailout is an effective way to alleviate the plight of private enterprises,the government should choose private enterprises with good quality as the bailout target,different bailout project need to choose different bailout model,the bailout plan should take into account the interests of all bailout parties.The contributions can be divided into the following points:(1)Taking the successful case of Chaxing Asset Management Company to bailout Truking,which is a representative industry,as a sample,the analysis enriches the current case study of China’s bail-out actions.(2)From the perspective of Chaxing Asset Management Company,this thesis explores the market-oriented motivation of the bailer in the policy-oriented bail-out,explores the connotation of the identity of the bailer as a strategic investor,and gives some new interpretations to the goal of bail-out.(3)Based on the bail-out mode selected in the case,this thesis makes a more in-depth analysis,summarizes the characteristics,motivation and effectiveness of the bail-out mode adopted in this case,and enriches the research on the bail-out mode theory.