The Effect Evaluation Of Equity Carve-outs

With the increasingly fierce market competition,equity carve-outs has become the method of asset reorganization for most listed companies in foreign countries,and the theoretical system of foreign dismantling is also becoming mature.In contrast,China’s equity carve-outs was late and not widely used.Since the listing of Tong Ren Tang in Hong Kong in 2000,there have been only a few successful cases of equity carve-outs of listed companies.In recent years,overseas listed companies are planning to return to domestic securities market.Under the rush of returning to domestic securities market,the equity carve-outs has been refocused by the company as a means of operation.At the same time,the opening of the GEM in 2009 also provided a good opportunity and market platform for the equity carve-outs on domestic securities market.However,due to the stricter supervision of such kinds of equity carve-outs at the policy level,the general practice of the equity carve-outs practice of listed companies in China is the "big A plus small H" model.The market premium arising from equity carve-outs as a secondary securitization and the effect achieved by equity carve-outs will create a win-win situation for the listed parent company,equity carve-outs listed subsidiary and capital market investors.Therefore,this paper analyzes the impact on the sustainable development of the capital market and the company based on the strategy of listed companies adopting the equity carve-outs strategy.Based on the summary of the domestic and foreign equity carve-outs documents,this article elaborates on the two basic hypotheses for equity carve-outs’ motives and the factors that affect the market and financial performance of companies.Furthermore,we selected the case of equity carve-outs of TCL Group and TONLY Electronics on the Hong Kong Stock Exchange in August 2013,and conducted an in-depth analysis of the equity carve-outs effect with the help of the incident research method and the financial index change analysis method.In this paper,the incident research method is used to find out the positive reaction of the capital market to the equity carve-outs event and to verify the consistency of the financial performance and market reaction of the listed parent company as measured by cash proceeds.On this basis,the split market effect was analyzed and evaluated from the perspectives of financing effect,business effect and management effect,and all obtained the positive effect of equity carve-outs on the sustainable development of equity carve-outs listed subsidiaries.