Motivation And Performance Of Private Placement Of Listed Companies

Since the reform and opening up,China’s economy has developed rapidly,and China has become the world’s second largest economy.China’s economy is huge.Even if it develops at a medium-high speed,it ranks among the world’s major economies in terms of speed and increment.High speed development but does not represent high quality development,with the further development of China’s economy,China’s sustained and rapid economic growth important driver of demographic dividend appeared inflection point,bring to China’s economic downward pressure,higher financing costs of enterprises,enterprise cash flow to flow,the current credit tightening,healthy growth of the enterprise development has brought a certain limit.As a kind of equity refinancing,private placement can be an important means for enterprises to raise funds.Efficient use of funds can expand the scale of enterprises,affect the performance of enterprises,and then affect the development of China’s macro economy.Therefore,it is of practical significance to study the motivation of private placement and the change of corporate performance.Chinese listed companies have a variety of financing methods,including equity financing methods: private placement,public issuance,convertible bond issuance,rights offering,etc.Private placement can bring sufficient funds for enterprises,optimize equity structure and stabilize corporate performance.Therefore,studying the motivation and performance of private placement will help listed companies in China to choose better financing plans and make better financing decisions,which will not only improve the value of the company,but also contribute to the study of relevant theories and cases of private placement,and provide reference and basis for the formulation of relevant regulatory policies.This paper studies the private placement of Poly Development,using information asymmetry theory,optimal capital structure theory,supervision theory and other theories,analyzes the motivation of poly Development private placement,using the event study method,financial index analysis and EVA three methods to analyze the change of corporate performance of poly Development private placement.The short-term performance impact is measured by market performance,the long-term performance impact is measured by the financial performance of the performance evaluation system of state-owned enterprises,and EVA is viewed from the perspective of EVA.In the study,the following conclusions are drawn when the short-term performance impact is measured by market performance: Within 15 trading days after the announcement date,poly Development’s cumulative excess return rate reached2.64%,indicating that the implementation of poly Development’s private placement has an obvious positive market return rate in the short term.It can also be said that the private placement has been recognized by investors in the capital market and has a good corporate performance.In terms of financial performance to measure the performance of the long-term impact of the study got the following conclusion: poly poly from the development of the private placement of profitability,debt risk situation,asset quality and business growth conditions index increases obviously,explain poly the implementation of the development of the private placement in the long run,be helpful for the long-term development of the company.From the perspective of Eva,it increases the liquidity of corporate cash,grasps the development opportunity and market demand,contributes to the improvement of corporate value and creates new value for shareholders.To find out the shining points and shortcomings,summarize its experience and lessons,and provide practice for other listed enterprises and regulators to further improve and standardize the implementation of private placement.Finally,in view of the above conclusions,the following strategies and suggestions can be summarized: First,broaden the financing channels of enterprises and make full use of the funds raised by private placement.Reduce financing costs and use funds exclusively to improve corporate performance.Second,optimize the capital structure and introduce the participation of major shareholders,institutions and natural persons.In the face of market conditions,enhance the risk resistance of enterprises.Third,strengthen the understanding of the relationship between private placement and corporate performance.Do a good job of external announcement and supervision,capital before,during and after the control.In this paper,the case study method is adopted to analyze the corporate performance of nine periods before and after the private placement of Poly Development in the construction industry of listed companies in China,analyze the motivation of this private placement and the change of corporate performance,and provide targeted opinions and suggestions for the whole process of private placement.At the same time,it can provide real valuable experience and development suggestions for decision-makers and investors of other listed companies in the industry,and effectively and orderly promote the steady and sustainable development of private placement of listed companies in the real estate industry under the background of China’s economic market reform.