Study On Financial Performance Of Equity Carve-outs Issue In China

In China's capital market,the Equity Carve-outs most of the time works as a conceptual equity operations,it mainly due to the Equity Carve-outs development in China lags far in mature Western markets as well as the relevant departments about its existing lack of clarity attitude.Equity Carve-outs related stocks once popular,but reality in our country the true sense of Equity Carve-outs cases just only a handful.However,since the first half of 2014,Under the impetus of the policy,the NEEQ(National Equities Exchange and Quotations)star expansion,to help China's A-share listed companies get on Equity Carve-outs provides a new way and ideas,and showing the scale of the trend.Firstly,the "Equity Carve-outs" of the range and concepts to be defined,this article is a series of studies on the short-term impact on the Equity Carve-outs of the parent company's financial performance issues;Secondly,this paper summarizes the current research,carding the existing theory and hypothesis about the Equity Carve-outs impact on the parent company's financial Performance changes;The feasibility of combining China's capital market situation and research,proposed Equity Carve-outs impact of changes in short-term corporate performance research hypotheses,laid a more solid theoretical foundation for empirical part later.To further examine the impact of the Equity Carve-outs of short-term financial performance of the parent company,this paper selected in 2000--2015,China's A-share listed the parent company Equity Carve-outs there subsidiaries to domestic and foreign capital markets,a total of 71 individual samples,use of financial analysis and cross-sectional regression model to analyze.The results show:After the factor analysis method to quantify the financial performance of the interim financial solvency,profitability and development capacity this three factors.Equity Carve-outs have a significant positive impact of parent companies with the three capacity:(1)Select the Equity Carve-outs in the market prices will have a positive effect for medium-term of the listed parent company.(2)Equity Carve-outs by the parent company to focus on core business,reducing the negative synergies brought about diversification,thus have a positive impact on the short-term viability parent.(3)By reduction of capital financing was neither able to alleviate the debt problems of the parent company,or on the profitability of the parent company had a negative impact;(4)excessive concentration of ownership worsened the solvency of the parent company.In the end,this paper made the recommendations,from the enterprise itself and the external environment both sides,warned the companies who intention to select the Equity Carve-outs to restructuring or corporate financing,need to fully consider their own development strategies and have the objective conditions,referring to the external environment's advantages and disadvantages,and prudent decisions related,not to blindly follow the trend.