Effects of corporate backdoor listings on firms' financial performance :a case of pharmaceutical industry in China

Abstract

With increasing environmental pollution, public attention to health is rising. For private pharmaceutical companies, quickly going public is the best competitive advantage. However, traditional IPO have many restrictions, leading these companies to opt for backdoor listings. Despite this, there is a lack of literature on the impact of backdoor listings on the pharmaceutical industry, making it a less understood area. Advisor Co-advisor This study uses annual financial statements to gather financial indicator data. The BART model identifies key financial indicators impacting corporate performance, while the MCMC method and Bayesian regression analyze net profit per share. CAPM calculates the weighted average cost of capital at different stages to determine the trend of economic added value. The impact of backdoor listing on the enterprise is analyzed by combining internal and external environmental factors. The findings suggest that backdoor listing significantly affects firms' undistributed profits and capital surplus and improves financial performance through capital injection and enhanced visibility. Comparison of economic value added before and after DZH's shell listing shows that despite the increased efficiency of listing after asset reorganization, long-term gains are limited due to management problems. Since 2019, the national centralized purchasing policy and the new crown epidemic have led to a significant decline in DZH's economic value added, with profits reduced due to rising raw material costs and price competition.