Case Study Of The Return Of Red-chip Corporate Issuance CDRs Case Study Of Ninebot Limited

In the early stages of domestic capital market,because of the high domestic listing standards,cumbersome IPO approval processes,and long queue times,many companies chose to build a red-chip structure to list and finance overseas,especially technology companies.However,after 2010,the willingness of many red chip companies to return has become increasingly strong,because foreign investment institutions maliciously shorted Chinese concept stocks,coupled with the tightening of foreign regulatory policies.At the same time,with the opening of the domestic capital market,and a series of policies have been introduced to create some opportunities for red chip enterprises to return and list.For example,in the "Several Opinions on the Pilot on the Issuance of Stocks or Stock Volumes in Innovation Enterprises" issued by the Securities and Futures Commission in March 2018,it is clear that red-chip companies can retain the red-chip structure,issuance of stocks or CDRs in China.CDRS,namely Chinese depositary receipts,are securities issued by the depositary in China on the basis of overseas underlying securities,which can help the overseas registered companies of red-chip enterprises list in China.CDR was launched mainly to serve innovative red-chip enterprises,and revised the issuance standards for their VIE structure,dual-class share structure,long-term unprofitability and other problems.It can be predicted that a new wave of red-chip enterprises returning to A-share listing has come.In this context,this thesis first analyzes the status quo,background and risks of red-chip enterprises issuing CDR to return to listing.Because Ninebot Limited is currently the only enterprise that has successfully issued CDR for listing,and its listing process is also extremely innovative.In the sorting out of the case of CDR issued by Ninebot Limited,the motivation,effect and success factors of its regression are analyzed.It is found that Ninebot Limited chooses to issue CDR regression mainly because it seized the opportunity of the revision of the rules of the Science and Technology Innovation Board,and considering its own global strategic layout and the time and capital cost under different regression paths,CDR may be the best choice for its regression.From the effect analysis,Ninebot Limited successfully issued CDR and went public,which not only obtained financing but also expanded its brand influence,which had the most obvious effect on the company’s market and financial improvement.The market value of the company soared,the financial performance of all aspects also improved greatly,and the corporate strategy and the use of raised funds also achieved ideal results.The funds raised by Ninebot Limited’s listing are used in new areas of its business strategy development,helping the enterprise to obtain new income growth points and further enhancing the competitiveness of the enterprise.The funds raised by listing have received positive feedback in the development of the enterprise.After analysis,it can be found that the successful issuance of CDRs by Ninebot Limited is mainly due to its strong strength and great potential for future development,as well as its ability to clearly disclose various information when facing strict inquiries from regulatory authorities.As a leader in the intelligent short transportation industry,Ninebot Limited possesses a large number of core technologies and continues to increase investment in independent research and development,further enhancing its core competitiveness.Moreover,in its development,Ninebot Limited focuses on the layout and investment of the business chain,as well as the feasibility study of fundraising projects.It invests in other enterprises to absorb its technology,confirms the feasibility of the project,and then invests funds,which not only realizes the technology but also extends the business chain of the enterprise,further enhancing its own development potential.Ninebot Limited has adjusted its equity structure,adjusted the division of AB shares,and clearly disclosed its equity adjustment situation and special voting rights structure in the review and inquiry.Overall,as an excellent technology innovation oriented red chip enterprise,the issuance of CDRs by Ninebot Limited has indeed solved the funding gap in its development stage,enhanced its brand influence and future development possibilities,and also gained recognition from regulatory authorities and trust from investors.With the reform and improvement of domestic capital market,it is the general trend for red-chip enterprises to return to listing,and CDR has enriched the return path of red-chip enterprises.In the future,more red-chip enterprises will return to listing through CDR.The successful experience of Ninebot Limited issuing CDR enriches the case study of red-chip enterprises returning to listing through CDR,and can also provide experience for subsequent red-chip enterprises that want to return to listing through CDR,and promote the improvement of relevant rules and regulations of domestic capital market.