Abstract: For the capital and technology-intensive telecommunications industry, two-, capital adequacy and expand overseas business development is a necessary condition, while the market is generally the preferred high-quality corporate financing, but has a blueprint for China's international strategy first truly multinational companies - Huawei Technologies, have been slow to market, therefore, analysis of the reasons Huawei is not listed for other non-listed Chinese companies, especially companies seeking overseas expansion has an important reference.
Paper Keywords: Huawei Technologies; financial management; ownership structure; international
An imminent public road
1.1 increased risk of employee stock
1990 Love is on the introduction of full ownership system, which not only opened a Chinese enterprise management mechanism generation precedent, but also to mobilize the enthusiasm of employees, to promote the development of enterprises, but during the establishment of the internal stock system, Huawei now has become the burden.
1998 to 2000, Huawei's internal shares incentives Huawei's performance was so rapidly soared, while the IT bubble burst in 2001 so that Huawei will inevitably suffer a heavy blow, greatly reducing the growth rate of Huawei, Huawei's sales of the year the amount of 25.5 billion, an increase over the previous year only 16% as sales decline, falling profits, dividends be reduced, staff enthusiasm frustrated by the negative impact on the incentive effects due to Huawei's internal shares many years of high returns the staff is very fragile state of mind with wages than in the internal stock dividend on the staff of Huawei rather more important source of revenue, once the dividend is counterproductive unhappy, causing fluctuations in the psychological staff from Huawei's ownership structure, the internal employee-owned relatively large proportion, according to the annual report of 2010, reaching more than 90%, financing large and scattered, according to Huawei's internal policies, employees left the company, the shares can be fulfilled, if the next three years, operational problems, runs the risk faced by the rapid upgrade.
However, Huawei's market, you can share this burden to the internal capital market to absorb the one hand, causing employees to ease the pressure of the volatile dividends, on the other to avoid unsatisfactory results caused by the internal tide runs shares, employees do not have to worry about the fate of the company's financial problems caused by stress.
1.2 The need for an international strategy
In recent years, the domestic telecom equipment market has been as far as the 1990s to maintain rapid growth, according to CCID data, carrier investment in fixed assets in recent years, the annual average growth rate declined rapidly, while the domestic market in China as the main product The domestic market share has more than 30%, Huawei in order to maintain their high growth, we must explore the international market. May 18, 2011, a Huawei will finance $ 1.
5 billion in the message to be thrown into the spotlight once again, the main reason behind the shortage of funds. In recent years, the global communications equipment manufacturers in addition to the brand, technology, quality , price and service competition of hard power, the financing conditions of the competition is heating up. Huawei's sales in international markets, although the rise, but because of high marketing costs, the net profit level is very low, as overseas business Overall, still at a loss, a certain amount of capital to withstand the pressure for capital and technology-intensive telecommunications industry double, capital adequacy is the business development and overseas expansion indispensable condition for high-quality businesses listed is undoubtedly the most direct financing channels, and is listed, you can also share placements, then the form of additional financing.
In addition, in 2010, trying to take advantage of overseas acquisitions to expand the international market, Huawei, but a series of disappointments, such as software vendors in the United States, 2Wire broadband network and wireless devices division of Motorola before the acquisition of two dismal end. As Huawei is not listed, the U.S. government The opaque background are difficult to trace, not convincing, while the market voluntarily accept strict capital market regulation, disclosure of detailed information to investors is the best solution.
Because of this, Huawei needs the support of access to capital markets, on the one hand to solve the problem of financing the other hand, transparency of their background, through the international capital market to improve their visibility.
In summary, the market is the only way for Huawei, and imminent, but Huawei has yet to market it, but why?
Huawei is not too awkward listed 2
2.1 Employee Stock Ownership opaque
<<Securities Act of>> the provisions of Article 54 of the Listing Agreement entered into shares of the Company's announcement should be up to the top ten list of shareholders and shareholding amounts, but because of historical reasons, internal employee-owned Huawei is highly opaque.
Huawei employees to purchase shares of the procedure is as follows: in each business year, the company's employees to work according to age, level and other indicators to determine each person can buy a few shares, funds and staff to take the cash register to buy division, the only A signature file is to recover. shareholding employees before the investment, do not know the situation of the company's shares, after the investment, do not have any credentials to prove they hold shares.
Huawei made in 1995 and 1996, had issued to employees 'employee stakes in the case book>> Description of the shares of employees, but after the reform in 1997, but never issued to the employees holding the' employee stock certificate. ' How many shares held by employees in the end, what percentage share, Huawei can not issue a clear figures and relevant evidence.
2.2 Share buy-back non-standard
According to <<state-owned enterprises in Shenzhen City, employee-owned pilot Interim Provisions>> of the relevant provisions, when employees from the company, no longer continue to hold internal staff shares, their shares will be repurchased by the ESOP, shares transferred to reserve . employee-owned personal monies will be refunded, according to the company on a year-end stock price per share book value of net assets, but for Huawei this non-listed companies, equity is not traded, its value is no frame of reference is relatively accurate, company to buy back shares when the share price can not be determined.
In addition, the early years to the local postal system also telecommunications 'Three production companies' in the name of the stock held by Huawei, the subscription employees only 'three production company' received a subscription credentials, but 'three production company' was disbanded because of policy reasons, only the Some shares are repurchased, some of which are still inextricably entangled, so that, whether external or internal stock shares, Huawei is difficult to open and transparent. Links to free download http://eng.hi138.com
2.3 dilution of shareholder control
According to Huawei's 2010 annual report, company chairman Ren Huawei only hold less than 2% of the shares, not difficult to see any stake gradually diluted as founder, he served as the central position within the enterprise is no doubt that their leadership ability to some extent, investors are able to win extra points, but the stake will be any Huawei will make investors doubt the company listed served as control, affect the size of fund-raising.
2.4 post-marketing monitoring
Huawei is positioning itself as a company rather than production-based technology innovation company to market a new product to two or three years on the production model to pricing, such competitors as the cost disadvantage, often lose market share, Meanwhile, small companies can not rise again, a lot of time to seize market share.
However, <<Law>>, the 'Securities Act>> specified in the stock market need to meet the last three consecutive profitable companies the last three consecutive losses by the State Council Securities Management Department decided to suspend its listed company the last three consecutive losses, in subsequently failed to return to profitability within a year by the Stock Exchange decided to terminate its shares traded. If Huawei's market, will be responsible for the performance of each quarter, you can not stand in a long-term perspective to pricing, the first to bear losses to dominate the market , and then profit.
3 Huawei way listing
3.1 Spin-off Face is not clear ownership structure, split into 2003 Huawei: Huawei Technologies, Huawei Holding other eight companies.
Listing of some of the major will be profitable in its original core business - based Huawei Technologies.
Huawei Holding is seen as the establishment of the internal stock solution to the problem of Huawei: Huawei Huawei Technologies union instead of holding, the holding unit of Huawei, while employees in the past held by Huawei Technologies stock, all to 'Huawei Technologies union' in the name of into the 'Huawei Holding' shares. Huawei employees after an internal holding system, also controlled by Huawei inherited, which means that Huawei's listing, the stock subscribed by employees in the past is not listed, but only after the listing of the net assets of enjoy growth and dividend benefits.
This will not only solve the pressure of employee stock bonus, and high potential risk of a run, but also due to historical reasons to avoid employee ownership structure is not clear to the overall market caused by obstruction of Huawei same time, to Huawei as corporate shareholders to controlling holders of shares of listed companies, but also helps to reduce the Huawei may be listed after the risk of hostile takeover.
3.2 change in profit model
Above analysis, Huawei's profit model is indeed allowed to quickly defeat the competitors, to seize a large number of market opportunities and when Huawei is listed, that means market regulation is bound to be strictly controlled and restricted. To get out of this predicament, frankly to accept the market regulation, have a fundamental change.
As a high-tech innovation developed relying on the company, the decision of its development or its underlying technology, if the technology behind even the best long-term financing instruments can not be allowed. To ride the stock market is not the true nature of high-tech companies, financial operations behavior is only an auxiliary, therefore, must be technically Huawei listed after leading opponents to focus on research and development should also open up new or able to accept public supervision of the profit model. Links to free download http:/ / eng.hi138.com