Research On The Motivation And Performance Of Spin-off Listing

The arisen boom of enterprise diversification in 1960 s has made enterprise's scale expansion as the main approach of increasing revenue,A large number of enterprises through acquisitions to expand the scale of the enterprise,form diversification,and acquire a great growth in market share.Although this kind of management strategy brought huge economic benefits to the enterprise in a period of time,but at the same time also bring a series of problems needed to resolve.With the constant expansion in the field of diversification,many companies find that the scale expansion has worsen the burden and reduced the management efficiency,the development of the enterprise into a dilemma.At present,as a revision of a wave of enterprises' over-expansion,mergers and acquisitions of enterprises,the spin-off listing was popularized in the 1980 s and 1990 s in the US.In China,the spin-off listing emerged later.China's first spin-off listing mostly was overseas spin-off and Hong Kong stocks spin-off by 2010,mainly because the development of China's capital market system is not sound,and our country main board market to spin off listing requirements is very strict,therefore,in this context,most domestic enterprises chose to spin off listing abroad.Now with the continuous development of China's capital market,spin-off listing has increasingly become a significant way of China's asset-restructuring.Therefore,in order to develop China's spin-off listing,at the end of March in 2010,the CSRC put forward that allowing the domestic listed company which meets the six conditions to split its subsidiary to list on the GEM,the GEM spin-off listing turns into the hot pursuit of attracting the market.However,under the circumstance that China's capital market is not yet mature,whether the spin-off listing is really beneficial to the company's value and whether it really can accelerate the development of the company,whether it can really be used as an important way to promote the asset reorganization.These questions are worth our further studying on spin-off listing.This paper follows a combined method of literature research and case analysis,firstly combs the concept and related theories of spin-off listing,then selects the case of Conba splits Jolly Pharmaceutical Company listed to make a concrete analysis,Conba splits Jolly Pharmaceutical Company listed is the first deal of GEM spin-off listing,which is very representative.The main part in the case analysis is to analyze the motivation and performance of the Conba splits Jolly Pharmaceutical Company,and performance analysis mainly takes the event study method and analysis of financial indicators.The theoretical research of this paper mainly includes the definition and characteristics of spin-off listing,main types,the difference between the spin-off listing and other asset reorganization and the theoretical basis of the spin-off listing.Among them,the most important part is the theoretical basis of spin-off listing,which are divided into company's business centralization theory,financing strategy theory,management motivation theory,internal capital market theory and asymmetric information theory.In the case analysis,firstly introduces the basic situation of Conba splits Jolly Pharmaceutical Company listed,which includes the background introduction of Conba and Jolly Pharmaceutical Company,industry background,the process of Conba splits Jolly Pharmaceutical Company and compliance analysis.The compliance analysis,financial mainly include financial condition before Conba splits Jolly Pharmaceutical Company listed,the analysis of independence and related party transactions.Followed by the analysis of motivation and performance of Conba splits Jolly Pharmaceutical Company,this paper argues that the main motivation mainly divided into the external motivation and internal motivation.The great development prospects of the pharmaceutical industry and the government policy support are the mainly external motivation,the internal motivation includes form the professional management strategy,enhancing the financing ability of Conba and Jolly Pharmaceutical Company and reducing the agency cost of management.The key part of this paper is the performance analysis of spin-off listing,which fully analyzes the state of development of parent-subsidiary corporation after the split,select the operation ability,debt paying ability,profit ability and development ability of the five financial index to conduct a comprehensive analysis,and explore share price changes and the cumulative abnormal returns of Conba and Jolly Pharmaceutical Company after spin-off listing.Finally,it concludes that spin-off listing has a positive effect on parent-subsidiary corporation development,and draws lessons worthy of reference for other enterprises during the process of Conba and Jolly Pharmaceutical Company.The primary contribution of this paper lies in the utilization of spin-off listing theory,combination with actual situation of China's capital market,selected this representative case of Conba and Jolly Pharmaceutical Company to analyze the motivation of spin-off listing,and carries out an exploration on three aspects,which are the state of development of parent-subsidiary corporation after the split,financial indicator and stock price change,sums up the positive effect of spin-off listing to provide references for development of domestic spin-off listing,and in a certain extent,promotes the theory research development of China's spin-off listing.