Analysis of LED lighting industry: "profit" and "disadvantages" of enterprise listing"

Shenzhen LED lighting companies fell a lot, mainly because of excessive investment, financial costs can not be well controlled, companies are being dragged down. A LED industry analyst, told reporters, LED lighting companies can compete with government orders to drive results.

Listed companies to bring benefits, but also accompanied by drawbacks.

An LED industry analyst, told reporters, LED lighting companies can compete with government orders to drive results.

Otherwise there is no listing and financing, only a road closed down.

Shenzhen LED lighting companies fell a lot, mainly because of excessive investment, financial costs can not be well controlled, companies are being dragged down.

The current government procurement is mainly LED street lights, due to the characteristics of financial settlement, will be high corporate accounts receivable, resulting in tight cash flow.

Small and medium-sized enterprises in the industry, especially the unlisted companies, are facing the problems of long time of capital turnover, large amount of accounts receivable, financing difficulties and so on.

In order to solve the problem of funds, many LED lighting companies eager to visit the domestic capital market.

First, companies can get a lot of long-term funds, reduce financial risk.

The listing can quickly raise billions of dollars of capital, expand business scale, and equity financing for enterprises no regular servicing pressure, enterprises can be very good to avoid fluctuations in business with the financial risk, improve credit, enhance follow-up financing capacity.

In addition, if the stock can reduce the asset liability ratio, easy access to commercial bank loans, when the book value of the company's market capitalization exceeded its net assets, the lender may extend more credit to the company, can share allotment, issuance, or issuance of corporate bonds.

Secondly, the listed companies can change the operating mechanism, establish a standardized management system.

In the process for issuing and listing, companies often have to undergo a rigorous review of the securities regulatory departments at all levels of government, and the agency under the guidance of transforming the management mechanism of the listing process is actually moving forward an important process of modern enterprise management mechanism.

Third, listed companies can promote managers to improve operating performance.

Because the operation of listed companies is relatively transparent, under the supervision of regulatory authorities and investors, managers will be more diligent to seek to maximize shareholder wealth.

At the same time, the shareholders and debtors are more responsible for the risks, which have higher requirements on the income, and have great pressure on the operators.

Fourth, the company can be listed on the formation of a huge advertising effect, enhance reputation, establish a brand.

After the listing of the company because always in the public view, stock analysts are closely watching frequently listed company, the news media also pay close attention to the company listed on the stock exchange, the company received more public exposure.

Enterprises can be listed at the lower cost with the media to expand visibility, establish brand image.

Fifth, the promoters can enjoy a huge amount of public capital stock issued by the formation of a huge reserve.

The promoters shares is based on its assessment of investment assets value conversion income, while the price of shares issued to the public according to the provisions of the Commission's earnings to determine, once the stock market traded, will greatly exceed the original issue stock price, to obtain huge profits of shareholders capital.

Disadvantages listed to bring benefits to the enterprise, but also accompanied by drawbacks.

Such as issuing stocks of listed companies, to pay a huge amount of financing costs; listed companies must timely disclosure of management, finance, personnel and other aspects of the information, it should bear a number of high cost of information disclosure, disclosure of business secrets and easy; twists and turns in the business, all kinds of media rendering may be detrimental to the corporate image, further aggravate the enterprise crisis; in the full circulation of stock of the situation, if because of mismanagement and other reasons caused by the market value of the enterprise seriously underestimated, is likely to suffer from "agency competition" and "hostile takeover" the threat of loss of control for the enterprise; the company listed and raise huge the funds put forward higher requirements on the operation of the company, when the enterprise management ability is not timely, the use of funds and other aspects of management problems , resulting in poor operating conditions, there will be a business crisis, reduce corporate value, etc..