Research On The Impact Of Dual-class Share Structure On UCloud's Performanc

For many years,my country has always adhered to the equity system of the same shares with the same rights.Under the same stock and same rights system,equity financing will lead to the dilution of the founder’s equity,which will seriously affect the full play of the founder’s human capital and is not conducive to the sound development of the enterprise.With the rapid rise of scientific and technological innovation enterprises,the governance structure of the same share and the same rights has gradually been difficult to meet the needs of their rapid development,and many enterprises have adopted the dual shareholding structure to go public abroad.The dualclass share structure protects the founder’s control by separating cash flow rights and voting rights,so it is adopted by a large number of technological innovation enterprises.In 2019,the Shanghai Stock Exchange’s Science and Technology Innovation Board officially introduced differentiated voting rights,marking the formal establishment of the dual-class share structure system in my country’s A-share market,which once again set off a research upsurge of Chinese scholars on the dual-class share structure.Based on this,this paper examines the first company in China to apply the dualclass share structure,UCloud,in March 2019,and compares the development history,financing history and equity structure of UCloud.By examining the existing literature and theories,the motivations for UCloud ’s application of the dual-class share structure are studied in terms of control,value of the founding team and external demand.In the case study section,we start with Du Pont analysis,followed by a detailed analysis of UCloud ’s financial performance by selecting key financial data from four perspectives:solvency,operating capacity,profitability and growth capacity,and a macro evaluation of UCloud ’s financial performance through a cross-sectional comparison with the industry.Then,a non-financial performance analysis is conducted based on three aspects: product competitiveness,market share and innovation capacity,which makes the impact of the dual-class share structure on UCloud ’s corporate performance more comprehensive.The potential risks of the dual-class share structure are then pointed out,mainly including the failure of internal and external monitoring mechanisms,overreliance on the founders and damage to the rights of small and medium-sized investors.Three possible countermeasures are then proposed to address these potential hazards,including improving the internal and external monitoring mechanisms,focusing on enhancing the capability and image of the founders and strengthening the protection of the rights and interests of small and medium-sized investors.Finally,based on the above analysis,it is concluded that the implementation of the dual-class share structure at UCloud is necessary and has a positive impact on UCloud’s performance,but at the same time the potential risks should be taken into account.It is hoped that the research in this paper will deepen the understanding of special voting rights and help companies to strike a dynamic balance between tilting the balance of control and protecting the rights of investors.