Research On The Motivation And Performance Of Donghua Energy Asset Divestiture From The Perspective Of Strategic Transformation

With the continuous development of China’s market economy,the market has also entered a new normal of structural adjustment and slowing growth,and business growth is facing many challenges.Timely adjustment of corporate development path and formulation of strategies to adapt to market changes are necessary to follow the market trend on the road to sustainable development.As a means of strategic transformation,asset divestment can effectively help enterprises to carry out strategic transformation.The key question is whether traditional energy companies can improve their sustainable development by divesting assets to facilitate strategic transformation.In this paper,we adopt a case study approach and select Donghua Energy,a leading company in the energy industry,as the research object to study whether divestiture can facilitate strategic transformation.Firstly,we analyze the internal and external motivations of Donghua Energy’s strategic transformation;secondly,we summarize the path of Donghua Energy’s strategic transformation through divestiture based on theories of optimal capital allocation,efficiency and financing,and analyze the effect of some financial indicators;secondly,we analyze the effect of Donghua Energy’s strategic transformation by selecting financial and non-financial indicators and market performance;and finally,we provide an analysis of the changes of Donghua Energy’s strategic transformation based on the changes of Donghua Energy’s strategic transformation.Finally,based on the changes of Donghua Energy’s strategic transformation,we propose some suggestions on how other companies in the same industry in China can use divestitures to implement strategic transformation.The results of the study show that: firstly,the internal motivation for Donghua Energy’s strategic transformation is the shrinking profit margin of its main products,and the external motivation is mainly the support for new energy and materials from the implementation of the national dual carbon policy and the fluctuation of the industry’s operation due to the international situation;secondly,there are three paths for Donghua Energy’s divestiture to influence its strategic transformation: to obtain funds through divesting the relevant enterprises and their businesses to relieve the corporate financing pressure;to transfer the corporate operation through divestiture.Second,the divestiture of Donghua Energy’s assets has had a three-pronged impact on its strategic transformation.Non-financial indicators are analyzed in terms of the competitiveness of the main business and the proportion of R&D and technical personnel of the enterprise,and it is found that the strategic transformation has improved the overall non-financial performance of Donghua Energy;in terms of market performance,Donghua Energy has improved its market performance in the short term after the strategic transformation;in terms of financial indicators,it is reflected in the growth rate of operating revenue,the continuous expansion of market share,the short-term improvement of product gross margin and being in the industry In terms of financial indicators,the growth rate of operating revenue keeps growing,the gross margin of products improves in the short term and is in the leading position in the industry,but does not maintain the momentum of growth,the solvency improves in the short term but does not improve overall,the growth rate of construction in progress keeps high,and the industry boom is high.Finally,this paper draws the following insights: first,the right divestiture helps the strategic transformation of enterprises;second,the plan of divestiture should be formulated according to the actual situation of enterprises;third,enterprises should focus on talent training and technology research and development.