The Asset Stripping Of Chinese High-tech Listed Company Motivation And Performance Analysis

Corporate divestiture, as well as corporate M&A, is an important means ofcorporate restructuring. It plays a significant role in boosting reserve corporateefficiency and optimizing industrial structure. At home, with the quick developmentof capital market, the number of corporate divestiture is increasing. However, itdoesn't attract the same attention as M&A. For the most part, references on corporatedivestiture t is studied as a part of corporate restructuring. Independent research intocorporate divestiture is scarce. All those factors result in theories lagging behindpractice. Why do the enterprises have corporate divestiture trading frequently? Whatconsequences will it bring? These are the questions which are worth deep researchand consideration.Chinese high-tech listed companies have experienced a rapid expansion inbusiness. Their profit scale is increasing in magnitude while the profit quality isdeclining. High-tech companies are characteristic of being based on technology andhigh added value development. However, many high-tech companies neglect thedevelopment of products of high quality after being listed successfully. They abuseresources in scale expansion and diversified management, changing themselves intotraditional enterprises. But compared with the traditional industry, they lack the lowcost advantage. As a result, those companies lose both the advantages. Manycompanies extricate themselves out of the difficulty by corporate divestiture, adjustingcorporate structure, integrating resources and strengthening major business.Grounded on the actual transactions of Chinese high-tech listed company'scorporate divestiture and the combined ways of standardized and empirical research,this thesis conducts a deep and systematic study into the causes and consequences ofcorporate restructuring of high-tech listed companies.The thesis is divided into five parts as follows:The beginning introduces the background, significance and methods of theresearch, as well as the innovative places, research scope, research content andframework. Part one reviews the theoretical and empirical research results related tocorporate divestiture. First, makes economics explanation on the effect of corporatedivestiture. Then reviews the empirical research results on causes and consequence ofcorporate divestiture. Finally makes comments on the research achievements at homeand broad, which serve as the beginning of my research.Part two analyzes the cause of corporate divestiture of Chinese high-tech listedcompany. First of all, its overall state from 2004 and 2005 is analyzed. The analysis ofthe cause of average companies' corporate divestiture and special cause of Chinesehigh-tech listed companies' corporate divestiture comes later. Finally, controllingsample and logistic model are adopted to conduct an empirical research on the causeof Chinese high-tech listed company's corporate divestiture. Research finds corporatedivestiture is correlated positively with industrial figure and financial leveragevariables related to subordinate departments in previous year of the company.Part three focuses on the consequence of corporate divestiture of Chinesehigh-tech listed company. This analysis is carried out in three angles: firstly, Tobin's Qis adopted to analyze industrial consequence of corporate divestiture. Researchdiscovers that the corporate divestiture of high-tech listed company brings thecompany negative industrial effect. Secondly, event study is used to analyze corporatedivestiture's influence over the stock price. Study shows that high-tech listedcompany's corporate divestiture causes loss in stock holders' wealth, while stockholders' wealth can be expanded a short time before Sample Company announces itscorporate divestiture. Later, multiple linear regression is employed to analyze therelated elements influencing stock holders' excess profit. Research shows that stockrights structure and the size of corporate divestiture have positive effect on excessprofit. Thirdly, corporate divestiture's impact on the performance of company'smanagement is analyzed by the means of accounting study. Profitability, management,debt paying ability, stock rights expansion ability, growth, cash flow and majorbusiness state, as well as twenty-one financial indexes are used to construct the indexsystem which reflects company's overall performance. By using factor analysis, theperformance evaluation model of high-tech listed company before and after its corporate divestiture is constructed, besides, the sample company's overall financialconsequence in the previous year, the right year and the next year of its corporatedivestiture is examined. Study shows high-tech listed company's corporate divestitureevents have no obvious influence on company's comprehensive managementperformance.Part four sums up the major research discoveries in the thesis, brings forwardsome superficial suggestions and points out the research limitations in the thesis aswell.