Research On The Motivation And Means Of Corporate Performance Changes After Performance Commitment Reaches The Standard

In 2014,China’s economic environment was sluggish.To this end,the government promulgated the following favorable policies: relaxation of M & A restructuring authority,abolition of administrative review,and the increase in payment tools.This act has activated the entire M & A market.However,along with the upsurge of mergers and acquisitions,there is three-high Valuation Adjustment Mechanism with "high premium,high valuation,high commitment" and the behavior of the target company to adopt earnings management to optimize performance.This has caused great losses to investors,especially small and medium shareholders,disrupted market order,and increased the difficulty of supervision by regulators.This article selects Jiangsu Huayuan New Energy as a case study,a target company that suddenly "performance changes" after fulfilling its performance commitments for three consecutive years.Based on the market environment and policy background at the time,this article explores the internal motivations of "performance changes" and identify and sort out its means.The main conclusions of this article are as follow.Due to insufficient management and control of Jiangsu Huayuan New Energy by the listed parent company Jiawei Xinneng,it used imperfect performance commitment system and earnings management to achieve high performance commitments that could not be completed.After the commitment period,the "big shower" has led to the phenomenon of "performance changes." Fundamentally,this is caused by Jiawei Xinneng’s three-high Valuation Adjustment Mechanism of "high premium,high valuation,and high commitment",which was signed due to the pressure to improve performance and the overheated M & A market.Based on the above conclusions,this paper considers the performance commitment system and analyzes the M & A environment and policies of the capital market,and puts forward relevant suggestions for investors and regulators to look at performance commitments,invest rationally,and improve performance commitment plans.