Research On The Motivation And Financial Performance Of Private Placement In Pharmaceutical Enterprises

According to the pecking order financing theory,companies tend to use internal retained earnings first,followed by debt financing,and then consider equity financing when financing new projects.However,in China,they prefer equity financing.From the perspective of the entire market,private placement is a popular refinancing method,especially in the biotechnology and pharmaceutical industries.However,its characteristics of large investment,high risk,and high returns can easily lead to blind investment by managers.Due to the lack of capital cost constraints,the return on capital is low.This thesis starts with a comparative analysis of the different motivations of the same research object,summarizes the different motivations of RF company’s private placement over the past decade,and explores the underlying reasons and financial performance.This thesis uses literature research,case study,event study,comparative analysis and other research methods to study case companies.This thesis summarizes and analyzes the motives for RF company’s targeted issuance up to six times,and studies what are the motives for RF company’s targeted issuance? By comparing and analyzing the financial performance before and after the targeted issuance,how will the targeted issuance under these motivations affect its financial performance? Finally,based on the comparative analysis of the same industry,if different companies choose different refinancing methods or choose the same methods,there may be differences in motivation and performance,and a horizontal comparative analysis will be conducted.The research finds that,firstly,different motivations bring different development capabilities to enterprises,but no matter what kind of motivation the targeted issuance behavior can improve the long-term management level of enterprises.Secondly,multiple private placements cannot improve the overall financial performance of a company.Overall,RF Company’s multiple private placements have indeed improved its performance in the short term,but in the long run,the improvement is not significant.Finally,there is still a gap between RF companies and the industry average.Although RF company’s multiple targeted issuance is indeed beneficial for corporate value growth,relying solely on targeted issuance to enhance the company’s debt paying ability is not enough,and it is still necessary to enhance its operational capabilities.The purpose of this study is to enrich case studies on the motivation and performance of equity refinancing methods in the pharmaceutical industry-targeted equity offerings,help RF companies choose refinancing methods more effectively,and provide relevant rationalization opinions to the pharmaceutical industry and regulatory authorities.The highlight of this thesis is that by selecting the average value of 38 sample companies as a reference for comparison companies,market factors can be roughly filtered out,and then the financial performance gap of RF companies can be compared horizontally.The inadequacy of the study is whether the selected sample companies for horizontal comparison are fully feasible? The second deficiency is that due to limited space,not all indicators were selected,and only representative indicators were selected for analysis.I hope that they can be gradually improved in subsequent research.