Research On The Performance Of Red-Chip Structure Enterprises Returning To The Domestic Capital Market

In recent years,as foreign regulatory policies continue to ramp up in the context of the U.S.-China game,red-chip stocks have been subject to repeated shorting crises overseas,and companies have turned around and chosen to enlist in the domestic capital market driven by the need to improve company performance and valuation.Especially in 2022 in the context of Russia-Ukraine War Red Chip structured enterprises uncertainty risk intensified,the return to the domestic capital market has become popular.Along with the establishment of the Science and Technology Board in the domestic stock market and the successive pilot registration system in the Science and Technology Board and the Growth Enterprise Market,red chip enterprises have made significant progress in mainland listing and financing.Undoubtedly,promoting the return of high-quality red chip structured enterprises to A-shares or the listing of unlisted red-chip structured enterprises in A-shares in an appropriate manner is an important issue to deepen the reform of domestic multi-level capital market and smooth the virtuous cycle of technology,capital and real economy.This paper analyzes market efficiency,financial leverage effect,noise trading,and control gain theory based on combing domestic and international literature and concept definition.Considering that red-chip structured enterprises return for their own performance(financial performance)consideration,and the current state has launched bonus measures such as science and technology board and depository receipts to welcome the return of high-quality red-chip structured enterprises,therefore,as red-chip structured enterprises will not only Therefore,companies with red-chip structure will not only choose the listing method,but also consider whether to retain the red-chip structure,the choice of capital market and the nature of equity.Therefore,this paper summarizes the applicable and feasible solutions for red-chip structured enterprises in different situations from four dimensions:market choice,listing method,equity structure and equity nature,in order to serve as a reference for red-chip structured enterprises that will return to China.Firstly,we select six red chip structured enterprises that have completed the return to the domestic STB,Main Board and GEM markets as sample enterprises,and use principal component analysis and relative valuation methods to compare the performance changes of the sample enterprises under different market choices;use the market adjustment method in event analysis to compare the performance changes of the sample enterprises under different listing choices;use Du Pont analysis to compare the performance changes of Finally,the entropy tops is method is used to compare the performance changes of sample companies with different equity ownership,and to draw relevant conclusions.Through comparative analysis,it is found that: first,when red-chip structure enterprises return to the domestic capital market,choosing to implement the registration system for market listing is conducive to improving the performance on the first day,and it proves that the current implementation of the registration system in the domestic capital market is conducive to the return of red-chip structure enterprises.Second,when red-chip enterprises return,choosing the IPO listing method is more conducive to a stable increase in day-to-day performance.Third,companies that retain red-chip structures are more conducive to increasing performance quarter-over-quarter.Fourth,when red-chip structure enterprises return,"H before A",high equity concentration and low equity balance are more conducive to year-on-year performance increase.The findings of the study have important implications for all red-chip structured enterprises preparing to return in the future: First,the current status of enterprises is in line with national policies and the market environment.In terms of market selection,market capitalization and financial requirements,listing method,equity structure requirements,market operation mechanism,industry and business type should be considered comprehensively;in terms of listing method,time cost,industry development characteristics and status,market timing,profitability and development level,corporate governance level,and credit image should be considered;in terms of whether to dismantle the red-chip structure,the main consideration is the current difficulties of retaining the red-chip structure.Second,balance the ex ante choice with the change in financial performance after the return.Retaining red-chip structure is better than removing red-chip structure,IPO is better than issuing CDR and shell listing,registered capital market is better than approved capital market,and enterprises with low equity balance and high equity concentration are better than enterprises with high equity balance and low equity concentration,and "dual listing + retaining red-chip structure + IPO + registered capital market" is the best choice.The optimal return path is "dual listing" + "retention of red-chip structure " + "IPO" + "registered capital market".