Research On The Motivation And Effect Of Fosun Pharma's Equity Carve-outs

Since 2018,a number of Listed Companies in the medical industry plan to carve out their subsidiaries and go public in Hong Kong stock market.At the same time,the attitude of the regulatory authorities towards equity carve-out has changed.In 2019,China Securities Regulatory Commission issued the draft for comments on the domestic equity carve-out of A-share companies,which provides a system basis for the domestic equity carve-out.Under the influence of this policy,the medical industry will set off the upsurge of equity carve-out.Should listed pharmaceutical companies carve out? What is the motivation of it and what effect will bring to the company? This paper selects the cases of Fosun Pharma's equity carve-outs.First,it analyzes the company's development strategy,strategic objectives and strategic means.Then,it analyzes the motivations of the equity carve-outs from the three aspects of the company's capital demand,value creation and the development of the subsidiaries.Finally,from the strategic achievement,market reaction and operation effect after the equity carve-out,this paper explores the impact of the equity carve-out on the parent and subsidiary companies.It is found that Fosun Pharma has capital demand due to the implementation of the strategy,but the company's financial situation is not good,the stock value is undervalued and the development of its subsidiaries is limited,so it makes the decision to split its subsidiaries into listed companies.This decision broadened the financing channels,alleviated the capital pressure,and obtained the positive market response.After the subsidiary was carved out,the operation effect of Sisram Medical was improved.Based on its own development strategy,listed pharmaceutical companies should select high-quality assets and appropriate listing places for equity carve-out,and inject the follow-up development of subsidiaries.The innovation of this paper is to take the development strategy of Fosun Pharma as the starting point of research and analyze the motivations and effects of its equity carve-outs.