Basic Knowledge Of Refinancing (2)

The choice of financing mode of SMEs is largely restricted by the financing cost of SMEs.

The actual cost of the financing of equity SMEs is dividend return. For enterprises, cash dividends are the cost of capital that enterprises actually need to pay.

However, in China's stock market, dividend payouts are heavily related to stock dividends and cash dividends.

In China, because the dividend policy of listed companies is mainly formulated by the board elected by the major shareholders, the dividend distribution policy becomes the weight that the management can control at will. Therefore, the actual cost of the external equity SMEs' financing becomes the cost that the management of the company can control. Compared with the hard constraint of the interest repayment of the bond SMEs, the management of the listed company is more willing to choose the soft constraint of the dividend distribution.

This is an important reason for China's listed companies to favor the financing mode of equity SMEs.

2, the corporate bond market is not yet mature.

The immaturity of corporate bond market is mainly reflected in the following two aspects: first, the lag of regulations.

At present, the main regulation of bond issuance is the enterprise bond Management Ordinance formulated in 1993, which stipulates that the interest rate of corporate bonds should not be higher than 40% of the residents' savings time deposit rate of the same period.

Because of this stipulation, the interest rate of corporate bonds is issued even according to the high limit of policy. Because corporate bonds still need to pay interest tax, their actual income is almost the same as that of treasury bonds. Compared with the low risk of treasury bonds, the earnings of corporate bonds are not attractive to investors.

Two, the scale of corporate bond listing is small.

At present, there are only 10 corporate bonds listed on the Shanghai stock exchange, with only six large state-owned enterprises issuing bonds, and many enterprises issuing bonds are not listed on the stock market. The circulation of bonds is not high.

Based on the above two reasons, in terms of safety, liquidity and profitability, investors are not optimistic about corporate bonds, making the most important way of financing for SMEs in western countries in China's securities market is still in's infancy.

Therefore, listed companies can only choose more equity financing methods such as issuance and rights issue.

3, special ownership structure.

Statistics show that by the end of 2001, the share of public investors' shares accounted for only about 34%, while state shares accounted for 47% of the share, while other non tradable shares accounted for 19% of the share.

Generally speaking, the state-owned shareholders are in the absolute holding position in the listed companies. Even if the shareholders of some listed companies are only in a relatively controlling position, but because the public investors are very dispersed, the majority of the public investors who are in the majority of the population are also difficult to obtain control of the listed companies, and the public investors can not really participate in the decision-making.

Under such circumstances, management decisions do not represent the rights and interests of most of the shareholders in circulation, and to a large extent represent only the interests of minority shareholders.

Due to the premium issuance of the financing of small and medium-sized enterprises, the interest of the old shareholders has increased rapidly through the financing of small and medium enterprises, and it is a dilution of rights and interests for the new shareholders.

Because large shareholders can gain additional equity growth through equity financing of SMEs, large shareholders with decision-making power will have strong willingness to finance SMEs.

In addition, large shareholders of some listed companies use their own holding position to launch a large proportion of cash dividend schemes after refinancing small and medium-sized enterprises, and share most of their dividends according to their share proportion.

4, the guiding role of policy.

Under the approval system, the SME financing conditions are more stringent and the audit time is longer. The listed companies hope to raise as much cash as possible.

With the promulgation of the management of IPO in 2001, many listed companies have launched an additional plan to set off an upsurge.

In the second half of the year, due to market reasons, the difficulty of the issuance of the issuance increased. Many companies switched to the rights issue and convertible bonds. When the issuing method of the convertible bonds was issued and the channel restriction system was implemented by the regulatory authorities, the convertible bonds did not take up the channel and were not restricted by the financing gap between the small and medium enterprises no less than one fiscal year.

Dividends issued by the listed companies in March 2001 were listed as the key issues in the financing of small and medium-sized enterprises. The CSRC issued the Guidance Committee on the issuance of new shares issued by the China Securities Regulatory Commission (CSRC) issued by the securities and Futures Commission in the same year. It also suggested that attention should be paid to dividend payouts in the past three years since the listing of companies, especially the proportion of cash dividends to distributable profits and the reasons for the board's unstated distribution. Therefore, most listed companies began to cash dividends from 2001.

These situations show that policy regulations play an important role in guiding the financing of SMEs.