The Effects Of Equity Carve-outs On Corporate Performance

With the rapid development of China's capital market,in order to further increase the value of enterprises,a number of enterprises are actively seeking effective way to increase efficiency.In the past 20 years,as an important way to expand,acquisition has been the protagonist in this arena.However,Equity Carve-outs which has been used as a mature way for enterprise reorganization in foreign countries,has attracted no attention until 2000 the Tong Ren Tang successful apart appear on the capital market.As the regression from diversified to specialization,some enterprises regard Equity Carve-outs as a useful attempt to maximizing the value and put it into practice.Due to the unsound of China's capital market,domestic main board market imposed strict limits for Equity Carve-outs.Under this condition,most of the domestic enterprises have been selected for overseas Equity Carve-outs mode.However,there's some doubt about its suitability for Chinese Enterprises,in the condition of China's weak efficient capital market,does Equity Carve-outs can really bring value to enterprises and shareholders,which capital market is the best for the domestic listed companies to carve out,GEM,HK market? These questions need us discuss deeply,at the same time,it also bring more value on the research of corporation performance of Equity Carve-outs.Following the open of Growth Enterprise Market in 2009 and the China Securities Regulatory Commission permit domestic listed company splits constituent company to the GEM Listing in 2010 April,more and more companies especially high-technology companies will have more choice.Based on those conditions,this article will review and analyse the case of Tongfang Technovator carve-out in HKEX market and Nationz Technologies carve-out in Chinese Second-board Market,and find the impact on corporate performance of carve-out listing in the finance market,to provide experience for those enterprises that intentionally plan to carve-out listed operation.The dissertation mostly adopts the methods of normal analysis and case studies analysis.It analyses the concept,hypothesis,model of the Equity Carve-outs,analyses the effect of Equity Carve-outs on enterprise and capital market,combining with the development of domestic Equity Carve-outs at the same time,analyses the new entry conditions of Equity Carve-outs.Finally,it introduces the case of Tsinghua Tongfang carve-out Tongfang Technovator and ZTE carve-out Nationz Technologies.It analyses the background of carve-out companies,the reason of carve-out,the financial index of the listed company before and after the Equity Carve-outs from the aspects of solvency ability,profit ability,operating ability,growth ability.At the same time,it analyses the change of share price of the parent-subsidiary company before and after the Equity Carve-outs to study the impact of Equity Carve-outs on corporate performance.Then they should take their own development strategies,operating management and capital operations into consideration.At last,they could make the most appropriate choice for the companies' future development.