Study On The Return Path And Economic Effects Of "VIE+CDR" Model Of Red Chip Enterprises

With the speedy development of China’s economy,the establishment of the capital market system is growing more and more entrenched,and the close connection between the domestic market and the international market has accelerated the investment demand of domestically based investors and broadened the scale of the residential market.However,due to changes in the international situation,international trade disputes have emerged,red-chip enterprises have been repeatedly shorted,triggering a crisis of confidence,With the deteriorating investment environment and corporate undervaluation in overseas markets,a large number of premium red-chip companies plan to return to the domestic market.Simultaneously,the registration system of the domestic capital market and the installation of the Science and Technology Innovation Council have expanded the tapestry of diversified market development and provided a platform for the development of growth start-ups and high-quality science and technology innovations.This has created a platform for the development of burgeoning new business startups and high quality science and innovation enterprises.The Chinese government has implemented a series of measures to support the double tracking of domestic and crossborder transportation,allowing red-chip companies that have built VIE structures to issue CDRs and return to the domestic market,attracting high-quality red-chip companies to return to the domestic market.The first domestic red chip company listed through "VIE+CDR" is selected as a case company,and the path of listing through "VIE+CDR" model and the economic effects generated are analyzed.Firstly,We analyze the background and relevance of choosing No.9 as a showcase study,refer to relevant national and international literature,and define the prime firm concept;second,we investigate the background and performance trajectory of prime firms and No.9’s profile,as well as the analysis of No.9’s "VIE+CDR" model.Finally,we analyze the motivation for the return of No.9 and the value creation mechanism of the "VIE+CDR" model,and analyze the overall effect of the return of No.9 in terms of market effect,financial effect and comprehensive effect,and put forward relevant inspirations and suggestions.The main conclusions of this paper are as follows:(1)The choice of "VIE+CDR" model has enabled Nine to obtain a high share price and a high over-accumulation rate,expanding the market effect of the enterprise,broadening the financing channels,and improving the R&D investment and output of the enterprise,which has improved the market competitiveness of the enterprise.(2)The return of Nine to the domestic market has improved corporate financial performance to a greater extent,optimized the capital structure,eased financial pressure,improved corporate profitability and created higher earnings.(3)The overall intrinsic value of No.9 was analyzed and calculated by combining the previous market and financial effects,and the results showed that the intrinsic value of No.9 was lower than the market value,indicating that the enterprise value of No.9 was improved.We also analyzed the internal governance effect of adopting VIE+CDR,which improved the internal control mechanism and enhanced the disclosure of information.