Research On The Performance Of China Railway Construction Corporation Limited's Equity Carve-outs Subsidiary

With the continuous development of the global economic situation and the intensification of trade frictions,export trade faces more serious challenges,and the adjustment of industrial structure of domestic enterprises is the general trend.From 2015 to now,more than 50 Ashare listed companies have planned to the equity carve-out,including China Mobile,Tencent and other well-known companies.In the current economic environment,it is an inevitable trend to enhance the company's management efficiency and get rid of financing constraints by the equity carve-out.Therefore,in-depth study of the motivations,processes,and changes in the performance of parent-subsidiary companies after the completion of the equity carve-out is the focus of our current research.Based on information asymmetry hypothesis,core strategy hypothesis,management incentive hypothesis and financing strategy hypothesis,this paper expounds the impact of the equity carve-out on the performance of parent-subsidiary companies.Firstly,the article introduces the background,motivation and process of in the equity carve-out of China Railway Construction Corporation Limited and Subsidiary Company.The motivation for its equity carve-out is to expand overseas markets,ease financing constraints,obtain premium income and optimize corporate governance structure.Secondly,it analyzes the short-term market reaction and long-term company performance of the company before and after the equity carve-out In the short-term,the equity carve-out gave the parent company excess returns at the time of listing,but the positive impact of the announcement effect of the equity carve-out was limited.In the long run,through the analysis of the combination of financial indicators and non-financial indicators,it is concluded that the capital operation strategy of China Railway Construction Corporation Limited 's equity carve-out of CRCC High-tech Equipment Corporation Limited has not continuously improved the decline of the parentsubsidiary company's operating capacity.Based on the above analysis,the article summarizes the motives of China Railway Construction Corporation Limited's dismantling of CRCC High-tech Equipment Corporation Limited,mainly reflected in the fact that this capital operation means highlights the company's main business,optimizes the corporate governance structure,and obtains premium income and promotion.The international popularity has broadened the overseas market.At the same time,it proposes future development for China Railway Construction Corporation Limited and CRCC High-tech Equipment Corporation Limited.For China RailwayConstruction Corporation Limited,it is proposed to determine the direction of the company's business according to the development of the current era,to pay attention to the market supply and demand dynamics to adjust the production rhythm of the company's products,improve the company's management efficiency,improve the company's working capital,and when selecting business restructuring targets,we must carefully analyze,recognize,and investigate measures to improve the company's performance.For the CRCC High-tech Equipment Corporation Limited,this paper proposes to avoid the single source of the customer source and the reasonable allocation of funds to improve the company's performance level.