Performance Study Of Hengrui Medicine's Introduction Of Private Equity Investmen

Since the 21st century,technology-intensive innovative enterprises have played an increasingly important role in China’s economic development and have made a significant contribution to the country’s innovation and technological progress.Innovative enterprises are fundamentally different from traditional enterprises,as they rely more on R&D innovation and require significant financial support.However,due to their nature as intangible asset-based enterprises,they are more difficult to finance than traditional enterprises.In order to strongly support the development of innovative enterprises,General Secretary Xi Jinping announced the establishment of the Science,Technology and Innovation Commission at the first China International Import Expo on 5 November 2018 as a way to ease the financing difficulties of innovative companies.In addition,with the development of the domestic investment and financing market,private equity funds have become a powerful player in the financial market,and the emergence of a private equity market has facilitated the financing of innovative enterprises and promoted the continuous progress of enterprise financing activities.The purpose of this thesis is to examine the changes and impact of private equity investment on the performance of innovative firms through case studies and theoretical discussions.Firstly,we analyze the motivation and path of introducing private equity investment to innovative enterprises from four aspects: capital adequacy,financing advantages,equity structure and competitiveness in the same industry.This sets the theoretical framework for the following case study,Climax Capital’s introduction into Hengrui Pharmaceutical.Next,we briefly describe the current state of the private equity industry in China and understand the investment and lending entities and the financing process.A longitudinal comparison of the financial and non-financial performance trends of Hengrui Pharma before and after the introduction of private equity was conducted to examine the impact of private equity on the performance level of innovative companies.Finally,recommendations are made based on a cross-sectional comparison with other peer companies that have not adopted private equity investment through the gray correlation method.A case study of the introduction of private equity investment by Gyeongju Pharmaceutical and Seaweed Capital shows that prior to the introduction of private equity investment,the situation of Hyeongju Pharmaceutical was not satisfactory,due to suboptimal profitability and operational capacity.However,after the introduction of private equity,the situation improved considerably.In conclusion,the presence of private equity in innovative companies can effectively meet the capital needs of companies,expand financing channels,optimize internal governance and enhance competitiveness.In order to improve the match between private equity funds and innovative enterprises,this thesis puts forward proposals to improve the "green development channel".