A Case Study Of Ping An's Spin-off Ping An Healthcare And Technology Company Limited In Hong Kong Stock

For a long time,in order to improve the competitiveness in the industry,enterprises will constantly adjust their capital structure.Before the 1980 s,diversification and large-scale development was the main direction for enterprises to adjust their capital structure in the capital market.However,with the in-depth study of scholars,excessive diversification and scale will produce value loss.It is not conducive to improving the competitiveness of enterprises but will reduce the management efficiency of enterprises.As a method of capital contraction reorganization,spin-off listing can separate part of the resources owned by the enterprise,make the enterprise focus on the core development,thus weakening the loss of value.In the face of the rapid development of the economic environment in China,contemporary enterprises urgently need to grow and innovate,and the spin-off listing just provides a new path for enterprise innovation.As a development strategy,spin-off listing can promote the development of national strategic emerging industries.Through the separation and listing of enterprises,the businesses with good development prospects and national policy support will be separated,and the financing function of the capital market will be fully exerted,so as to improve the efficiency of resource allocation and governance mechanism.Spin-off listing refers to the process in which the operation of the subsidiary is separated from the legal and organizational levels by the parent company,and capital operation is carried out to achieve the purpose of listing.Spin-off listing first appeared in the European and American capital markets.After more than 10 years of popularity,it has been widely used in Hong Kong capital markets.However,the domestic capital market was only formally introduced to this concept in 2000.This paper chooses Ping An spin-off Ping An healthcare and technology company limited listing in Hong Kong as a case study and analysis.The spin-off listing mode adopted in this case is PE incubator mode,which is one of venture capital incubators.Among them,PE is the abbreviation of private equity,i.e.private equity investment,which means that the model is named because the parent company is similar to private equity investors in the incubation process of subsidiaries.In this mode,the parent company injects the funds obtained in the long-term development into the R&D projects with development potential to provide a financial guarantee for the birth of high and new technology,thus incubating the subsidiaries with emerging industries as the main business and good prospects for development.After that,under the appropriate conditions,the subsidiary companies will be split and listed to recover the investment funds,forming a closed-loop capital return,and the next potential project will be researched and developed.Most of the enterprises using this mode are comprehensive enterprises,whose business is diversified and there is no competition between the parent company and subsidiary company.This paper mainly uses the literature induction method and the case study method to analyze and study,the full text is divided into five chapters.The first chapter is the introduction of this paper.First of all,this paper introduces the research background and significance.Secondly,the literature review of previous scholars' research results,that is,the motivation and effect of the spin-off listing are reviewed respectively.Finally,the research ideas,methods,contents and framework are clarified.The second chapter is an overview of the theory of spin-off listing.First of all,it introduces the definition and mode of spin-off listing,especially the VIE architecture(Variable Interest Entities,hereinafter referred to as VIE)involved in the selected cases.Secondly,it puts forward three common motivations in theory,including the need of the core strategy of the parent company,the need to transmit good signals to the market and the need to broaden the financing channels of the subsidiary company.Then,on the basis of the three motivations,we get the three effects that the spin-off listing can produce,including improving the management efficiency of the parent-subsidiary company,effectively improving the financing ability of the subsidiary company and realizing the second premium of the parent company's equity.Finally,the main theoretical basis of this paper is introduced,including information asymmetry theory,core competence theory and principal-agent theory.The third chapter is a detailed introduction of the case of Ping An's spin-off of Ping An healthcare and technology company limited.First of all,it introduces the relevant information of Ping An and Ping An healthcare and technology company limited and the external environment of the spin-off.Secondly,from the perspective of Ping An,this paper analyzes the causes of the spin-off,including improving the construction of the ecosystem,triggering the revaluation of enterprise value and meeting the financing needs of the medical technology business.Then,it combs the whole process of the spin-off,including: the establishment,financing and restructuring of overseas-listed entities;the establishment,vie structure and restructuring of domestic business entities;and the final listing plan.Finally,the consequences of the spin-off are described,including Ping An's loss of the control of Ping An healthcare and technology company limited,the acquisition of wealth by core employees of Ping An due to invisible equity incentives,and Ping An's continued divestiture of medical technology business to integrate internal resources.The fourth part is to analyze the effect of the spin-off listing.First of all,from the perspective of Ping An,the effects of the spin-off listing include: the decline of the control right of Ping An healthcare and technology company limited;the rise of stock price after the announcement;the rise of the overall valuation of the group;and the improvement of the competitiveness of medical technology business sector.Secondly,from the perspective of Ping An healthcare and technology company limited,the effect of the spin-off listing on it includes: the trend of stock price decreasing first and then rising;the enhancement of financing ability;the further alleviation of the principal-agent problem.The fifth part is the conclusion and enlightenment of the case.This paper considers that Ping An has improved the construction of “medical and health ecosystem” through the spin-off listing,improved the overall valuation of the group,and met the financing needs of the medical technology business sector.However,the spin-off listing may bring the risk of dilution of the original parent company's equity.In addition,enterprises should choose their own spin-off listing methods according to their own conditions,and protect the listed companies after the spin-off.