Seven Major Financial Changes That Listed Companies Should Pay Attention To

　    上市公司股權分置改革將對中國證券市場的優化資源配置、恢復定價功能、改善上市公司治理與考核、促進金融創新、完善市場監管等方方面面產生深遠的變革及影響，同時在很大程度上改變了上市公司的財務管理環境，帶來財務管理目標和模式的深層次轉變。股改完成后，財務信息披露與透明度也可能面臨更加嚴峻的挑戰。上市公司應通過轉變財務管理理念，完善財務管理職能，實現財務國際趨同，做好財務管理創新，提高財務專業素質，加強財務法制意識等措施來適應全流通的市場新環境。

The split share structure of listed companies is a special problem arising from the development of China's securities market. For a long time, it has distorted the pricing mechanism of the securities market, and made corporate governance lack common interest basis, which is not conducive to the formation of stable expectations of investors, and has restricted the healthy development of China's listed companies and securities markets.

Since October 9th this year, the listed companies that have completed the reform have cancelled the "G" mark to restore the stock before the implementation of the stock reform scheme; and the company which has not been modified or has not yet been carried out but has not yet been carried out but has been labeled as "S" for short, which indicates that the Chinese securities market has entered a new era of post ownership separation.

There is no doubt that the split share reform of listed companies will have far-reaching changes and influences on the optimization of the resources allocation, the recovery pricing function, the improvement of listed company governance and assessment, the promotion of financial innovation, and the improvement of market supervision in the Chinese stock market. At the same time, the financial management environment of the listed companies will be changed in a large range, and the deep pformation of the financial management goals and patterns will be brought.

　　股改后中國證券市場

Multiple changes

The reform of non tradable shares of listed companies is a major institutional change in China's securities market. Its essence lies in eliminating institutional obstacles that affect the function of the securities market, realizing the consistency of the interests of all shareholders of the listed companies, forming a common interest basis for optimizing the corporate governance structure, stabilizing market expectations, and improving the investment value of the securities market by improving the stock price formation mechanism of the listed companies, and will fundamentally change all aspects.

1, in the various functions of optimizing the allocation of resources, the functions of mergers and acquisitions have been highlighted and strengthened.

Because of the stock market reform, the circulation of non tradable shares which had not been circulated before circulation, changed the situation of split share structure, realized the full circulation of shares, and provided sufficient market conditions for the function of mergers and acquisitions.

Merger and acquisition activities at all levels will become increasingly active, which is of great significance for adjusting stock structure and optimizing asset quality.

2, the pricing function of the market is more true.

In the case of split share structure, the market price is only a part of the price of the circulating stock, and it can not reflect the capital and assets of the listed company in a complete and comprehensive way.

After the share reform, the fully circulated market will gradually form an independent pricing function, so that the stock price can reflect the real value of listed companies more appropriately.

3, share reform will further improve the corporate governance structure and assessment management system of listed companies.

Under the situation of split share structure, different types of shareholders lead to the separation of goals, interests and behaviors due to the lack of common interests. After the split share structure reform, both the circulating shareholders and the non circulating shareholders have the same value judgment standard, which will inevitably promote all shareholders to pay close attention to the operation and development of the company. Large shareholders will be more concerned about the promotion of the company value and the reflection of the securities market, and establish an incentive mechanism conducive to the long-term development of the enterprise, thus forming a multi-level external supervision and restraint mechanism.

At the same time, the management of listed companies will increase the new content of market value management, and new changes will appear in the examination system and dynamic management mode.

4, the full circulation market environment, the enhancement of market restraints and the reduction of administrative intervention will raise a higher demand for securities regulation.

Securities regulatory agencies will also adapt to the new market environment and pform from regulatory regulations, regulatory institutions, regulatory models, regulatory mechanisms, regulatory means and other aspects, and gradually enhance the service function of the securities market.

In addition, with the advance of share reform, the institutional innovation, product innovation, tool innovation and mechanism innovation in the stock market will get unprecedented development.

Moreover, foreign capital has been allowed to enter the two tier market in the name of strategic investors, which means that the market has opened up new channels for opening to the outside world, and the pattern of opening up the stock market has further expanded.

　　股改后財務管理

Profound changes

In the era of split share structure, the financial management behavior of listed companies is seriously distorted.

The divergence of interests among shareholders makes the contradiction between shareholders unable to be reconciled, so that the goal of financial management, namely, maximizing enterprise value and maximizing shareholder interest, is difficult to effectively and effectively achieve.

Coupled with the historical problems of divestiture and spin off, the goal of financial operation of listed companies is actually maximizing the interests of controlling shareholders.

The financial operation under such a financial goal can only lead to such consequences: sacrifice the interests of circulating shareholders and even sacrifice the interests of non controlling non tradable shareholders to maximize the interests of controlling shareholders.

Under the split share structure, all kinds of shareholders are not equal in the risk of the issuance, the rights issue and the related financing process of the listed companies. The rise and fall of the stock price caused by the financing behavior directly affect the interests of the shareholders of the circulation stock, but have no binding force on the non circulating shareholders. The former pays attention to the fluctuation of the stock price in the two tier market, while the latter pays attention to the increase or decrease of the net assets per share.

For example, a listed company has issued 60 million shares at a price of 12 yuan per share, and the net assets per share increased from 8.16 yuan to 9.21 yuan after the issuance.

Large shareholders can easily increase their net assets by issuing additional shares, and the subsequent decline in the stock price has seriously damaged the interests of the tradable shareholders. The interests of the two types of shareholders are obvious.

Before the split share structure reform, the difference between the interest starting point, the pursuing goal and the profit way of the non tradable shares and the circulating shares leads to the distortion of the pricing mechanism in the securities market, and the performance of the listed company deviates from its share price, and the valuation standard of the stock is chaotic.

The circulating shareholders measure the investment value in terms of the market value of the stock and confirm the profit and loss with the change of the market value; the non circulating shareholders as the controlling shareholder are more concerned with net assets and whether they can increase the value through the issuance of the rights issue.

After the completion of the split share structure reform, the interests of the shareholders have reached an agreement, which has realized the same rights and shares in the real sense, which has changed the objectives of the financial management of listed companies, and the valuation standards of listed companies have gradually become the same.

At the same time, with the full circulation of shares, capital market mergers and acquisitions will also become more active. Maintaining stock prices will become an important part of the operation and management of listed companies, especially financial management. The change of stock circulation to the financial management of listed companies will be revolutionary.

1, after the split share structure reform, the maximization of enterprise value will become the goal of financial management of listed companies.

In a market economy, the essence of an enterprise is the sum of the multilateral contractual relationship consisting of human capital and material capital.

The essence of contract requires that the main body of corporate governance should be equal.

The split share structure reform first solves the conflict of interests among various shareholders, realizes the same rights and shares the common interests of all shareholders, thus rationalizing the foundation of the corporate governance structure and activating the market of corporate control.

The goal of financial management is to pform the maximization of the controlling shareholder's interests into the maximization of enterprise value. It requires the company's management to maximize the wealth of all shareholders on the premise of ensuring the company's sustainable value creation and social responsibility.

2., after the split share structure reform, we should optimize financial decisions and ensure that the company's sustainable development will become one of the strategic objectives of financial management of listed companies.

In the era of non tradable shares, the controlling shareholders have serious short-term profit manipulation and other short-term actions in order to achieve the purpose of issuance, rights issue or licensing.

Especially for listed companies with poor performance, the short-term phenomenon of financial management is more serious.

With the formation of the full circulation and the improvement of market supervision efficiency, the information content of the stock price includes not only the information of the past profitability and profitability, but also the uncertainty of future profit potential and time distribution.

Therefore, in the financial strategy decision making of investment project selection, financing strategy formulation, dividend policy formulation and medium and long-term production and operation planning, we must take full account of time value and uncertainty, pay attention to the balance of factors such as scale, profitability, risk and so on, ensure the sustainable development of the company, and pay attention to continuously enhancing the enterprise value.

3, after the split share structure reform, paying attention to share price and maintaining stock price will become an important part of financial management of listed companies.

For a fully circulated listed company, stock prices reflect investors' confidence in listed companies and future earnings expectations; for controlling shareholders, stock prices reflect the value of assets under control and become one of the main tools to effectively protect the stability of shareholding power; for company management, stock prices reflect the efficiency of resource allocation and utilization in the company's investment and financing decisions, and affect the future financing costs.

In the macro and micro factors that affect stock prices, a variety of financial management indicators including profits will be important factors.

Due to the low degree of concern about stock prices in traditional financial management, this will become a new topic of financial management of listed companies after stock reform.

4, after the split share structure reform, future cash flows and other financial indicators will become an important criterion for asset valuation.

Asset pricing function is the basic function of capital market, and is the basis for effective allocation of stock resources.

The split share structure makes capital market lose asset valuation function or lack of scientific and effective valuation criteria.

After the completion of the share reform, the enterprise value is expressed as the future value of the enterprise and the present value calculated with the corresponding risk return rate as the discount rate, that is, the present value of the net cash flow in the future.

This will lead to a change in the core concept of asset valuation, from the emphasis on "book" to the "market", from the emphasis on "history" to the "future".

The concept of "net assets" will fade away from the core indicators of valuation. Asset profitability and future cash flows will become an important criterion for asset valuation.

5, after the split share structure reform, the use of effective capital operation to allocate resources will also become an important task of financial management.

After the elimination of the split share structure, the share price of the listed company is closer to the profitability and development potential of the company itself, so that it can reflect the value of assets more realistically. At the same time, the full circulation of the stock makes the pfer of equity ownership more market-oriented and simplistic.

These will greatly activate the market of mergers, acquisitions and control, and provide an unprecedented platform for enterprises to allocate resources through capital operation and maximize synergies.

The active market of annexation, acquisition and control right will inevitably lead to continuous innovation of various financial instruments and financial products.

Effective use of financial instruments and innovation of financial instruments for various capital operations and financial activities will become an important part of financial management of listed companies after stock reform.

6, after the split share structure reform, the financial risk management system will rebuild the evaluation system of investment risk and return.

Many enterprises have the non tradable shares of the listed companies. Before the stock reform, whether the long-term equity investment accounting adopts the cost method or the equity law, the investment is relatively static, and the investment value changes little.

After the completion of the share reform, the value of the investment is changing all the time. This requires financial managers to implement dynamic management, fully consider the two level market risk factors, establish a risk early warning control system for equity investment, closely monitor the direction of the listed companies, carefully analyze their business status and future trend, pay attention to the intrinsic investment value, and establish a new evaluation system of investment risk and return.

7, after the split share structure reform, the policy choice and management mode of financial management will further converge with the international market.

After the share reform, foreign capital has been allowed to enter the two tier market in the name of strategic investors, which means that the securities market has opened up new channels for opening up to the outside world.

In response to the split share structure reform in the stock market, the Ministry of Finance issued a new accounting standard system covering all kinds of economic activities of various enterprises in February 2006. It will take the lead in Listing Companies in January 1, 2007.

The reform of accounting standards is essentially a convergence of Chinese accounting standards and international accounting standards. Compared with the new accounting standards and international accounting standards, there are still some small differences in individual aspects, but the degree of consistency is quite high.

This will effectively guarantee the smooth entry of international investors and safeguard the further expansion of China's capital market opening to the outside world.

　　股改后財務管理

New problems that may arise

In the era of non tradable shares, listed companies often encounter false financial information disclosure under the control of controlling shareholders in order to meet the purposes of listing, refinancing and licensing.

After the completion of share reform, financial information disclosure and pparency may face more severe challenges. The motivation of false information disclosure may be more intense, and the related behaviors may be more difficult to restrict.

First of all, after the share reform, the interests of all kinds of shareholders gradually converge, mainly through the growth of stock prices; the holding power stability and management performance appraisal will objectively maintain a certain share price, which will make the motive of false information disclosure more intense.

Secondly, the reform of split share structure may lead to the change of ownership structure and corporate governance structure of listed companies, and may evolve from a single dominance to a highly decentralized and "insider controlled" corporate governance mode. Compared with the more stable controlling shareholders, the frequently changing management will make the behavior of false information disclosure more difficult to control.

Therefore, after the split share structure reform, how to provide the real and pparent financial information to the society is not only a test to the regulators, but also a higher requirement for the legal consciousness, professional ethics and comprehensive quality of the financial managers of listed companies.

　　股改后財務管理六項應對措施

1, change the concept of financial management.

After the securities market has been fully circulated, the financial management environment of listed companies has undergone profound changes. The goal of financial management has also been changed to maximize the value of enterprises. All kinds of financial operations of enterprises will revolve around this goal; financial strategy tends to ensure long-term sustainable development of the company and avoid all kinds of short-sighted behavior; pay more attention to the change of stock prices, and no longer sacrifice the share price to carry out financial management; asset valuations focus on "history" to pay attention to "future", pay more attention to assets profitability and future cash flow; and investment evaluation and management system gradually change from static management to dynamic management.

In short, the concept and mode of financial management at all levels of listed companies will change accordingly, so as to adapt to the new market environment of full circulation.

2, improve the functions of financial management.

In the era of split share structure, the finance and accounting of a listed company basically combine into one, financial management is attached to accounting, and the function of financial management is relatively weak, so it does not play its due role in the overall financial operation.

After full circulation, the market is becoming more and more standardized. Capital operation, mergers and acquisitions are becoming more and more active. Various kinds of new financial products, such as equity pledge guarantee and asset securitization, emerge as the times require. The function of financial management will be more important than ever before.

Therefore, the focus of financial management of listed companies will also shift from traditional accounting and production management analysis to enterprise financial management, and improve various financial management functions such as financing and investment, so as to optimize enterprise strategy and promote the continuous improvement of enterprise value.

3, achieve international convergence of finance.

With the full circulation of stock ownership of listed companies, with the further convergence of the domestic securities market and the international market and the implementation of the new accounting standards which are highly convergent with international norms, the financial management of listed companies is bound to be integrated with the international market. This requires financial managers to prepare themselves in line with international standards in terms of financial concepts, accounting policies, financial management modes, financial means of enterprises, asset valuation standards, and financial indicators system, so as to adapt to the irreversible trend of global economic integration.

4, do a good job in financial management innovation.

In the era of full circulation, the pfer of control rights of listed companies can be completed directly through the sale and purchase of shares in the two tier market, and mergers and acquisitions become more and more simple.

As a purchaser, how do we analyze the cost effectiveness of the merger and reorganization plan? How to assess the risk and return of M & A? As a buyer, how to effectively protect the anti takeover and stabilize the shareholding through the stock price? All these bring new problems to the financial management of the listed companies.

At the same time, with the boom of mergers and acquisitions in the capital market and the acceleration of the international process, all kinds of financial innovation products, financial instruments and financing investment will also be increasingly new.

Under the new situation, the financial managers of listed companies should take the initiative and boldly innovate, and deal with the new problems and emerging problems calmly.

5, improve the quality of financial professional.

The professional quality of financial management directly affects the level of financial management of enterprises.

The new environment for full circulation of securities market has put forward higher requirements for financial managers of listed companies.

Financial managers should not only renew their financial management concepts, relocate their financial functions, expand their financial management skills, but also learn more about securities, finance, finance, taxation, and law, expand their knowledge coverage, perfect their knowledge and skills structure, consolidate their professional foundation and improve their overall quality.

The fully circulated market environment is a challenge to the financial personnel of listed companies, and it is also a good opportunity for financial personnel to fully display their talents.

6, strengthen the awareness of financial legal system.