Performance Study on China’s ST Companies——Based on Factor Analysis Combined with Contribution Rate of Variance

The listed companies will be specially treated when their business performance is bad or there are serious accidents, which is a rule to reveal the investment risk of stock market. So it is very important to study the performance of listed companies under special treatment (ST companies) for the development of stock market in China. We choose 50 companies as the samples in the ST plate of 2006 in accordance with the industry categories and scale, and use Factor Analysis to study the integrated performance of the sample companies during 2005-2007. Our research conclusion shows that (1) the integrated performance of companies is the fundamental factor to determine whether it will be specially treated or not. (2) The performance of ST companies in china during 2005-2007 shows the upward trend, but their positive effects have gradually been decreased over time. (3) The profitability and debt paying ability of ST companies play very important roles. (4)The effective approaches of improving ST are corporate restructuring, asset stripping and debt restructuring