Research On The Private Placement Of Haitong Securities In 2020

In 2018,under the guidance of the deleveraging policy,five ministries and commissions including China Securities Regulatory Commission,clearly proposed to provide appropriate regulatory policy support for capital market operations such as private placement,IPO and convertible bonds.On February 14,2020,the China Securities Regulatory Commission issued the 2020 New Refinancing Regulation.The new rules improve the environment of the private placement market from both the supply and demand sides,and a full recovery is under way in the private placement market.In recent years,Chinese securities industry has played an increasingly important role in the capital market and has developed rapidly.However,a set of problems appeared in the securities industry when the industry grows day by day: the profit margin of the industry is narrowing,and the Matthew effect of the industry has become increasingly prominent.The capital strength is the core of the future competitiveness of securities firms.The 2020 refinancing regulations accelerate the pace of listed securities firms’ refinancing through private placement.Haitong Securities is a leading securities firm in the securities industry.It is the first securities firm to revise and announce the new plan of private placement in accordance with the2020 New Refinancing Regulation.It is also the securities firm which has the largest refinancing scale through a private placement in 2020.The private placement case of Haitong Securities is typical and representative.Under the background of deleveraging and the 2020 New Refinancing Regulation,it is of practical significance to study the successful private placement cases of Haitong Securities.This article clarifies the research background and significance,reviews and summarizes the existing domestic and foreign literature,and launches a case study of Haitong Securities’ private placement in 2020 based on relevant theories.This article introduces the basic situation of Haitong Securities and clarifies the formation process,specific content and implementation of the private placement.And the article explores the motivations of Haitong Securities’ private placement,analyses the choice of refinancing methods and the plan of the private placement,and analyses the economic effects of the private placement from four aspects: secondary market effects,financial effects,some periodical achievement of related businesses,and the shareholders’ income.Through the research above,this article draws the following conclusions: the motivations of Haitong Securities’ private placement in 2020 conform to the development trend of securities industry,based on the financial condition and the development strategy of Haitong Securities.And the allocation of funds is clear and reasonable.These lay the foundations for the success of the private placement.The choice of Haitong Securities’ refinancing method and the plan for the private placement are reasonable.In terms of economic effects,the private placement has brought a positive announcement effect to Haitong Securities’ stock price.It has also strengthened Haitong Securities’ profitability,solvency,and growth capabilities in varying degrees,but it has little effect on the improvement of operating capability.The 5 projects that the raising fund invest in have all improved.During the observation period,investors were not able to obtain a positive holding period rate of return by holding shares in Haitong Securities.However,the two profit distributions in the form of cash dividends,to a certain extent,buffered the shareholders’ losses due to the overall downturn in the securities industry.The private placement strengthened Haitong Securities’ capital strength and basically achieved the expected purpose.Overall,Haitong Securities’ private placement in 2020 is reasonable and successful.This article summarizes the successful experience of Haitong Securities’ private placement in 2020,and proposes recommendations for the private placement of securities firms from five aspects: firstly,the securities firms should make reasonable financing plans and investment plans basing on the business strategy.Secondly,the securities firms should carefully determine the objects of the private placement basing on the company’s own situation.Thirdly,the securities firms should choose the appropriate timing for private placement.Fourthly,the securities firms should strengthen the supervision and performance appraisal of the use of fundraising.Fifthly,the securities firms should consciously improve the information disclosure related to private placement.