Research On The Motivation And Economic Cinsequences Of Splitting Listed Company

Since the 1980 s,spin-offs have become popular abroad as a new type of asset restructuring.As a result of the rapid development of China’s capital in the 21 st century,many diversified group enterprises have also experienced problems such as inefficient operation and management,slow allocation of internal resources and other problems that are unfavourable for the synergistic development of enterprise.To keep the sustainable development of the inner divisions of labour,there are many large-scale businesses going for spin off some of their independent businesses or subsidiaries.On 5 January 2022,the SFC issued the "Rules on Spin-off of Listed Companies(for Trial Implementation)",which unified the requirements for domestic and overseas spin-offs,and the market and regulatory environment for spin-offs moved towards maturity,bringing a strong boost to the high-quality development of listed companies.This paper takes the incident of DYSILN,a spin-off subsidiary of Hong Kong Dongyue Feoeration,as the research object,and explores the motivations by using event research method and comparative analysis method of the spin-off and listing of DYSILN by combing the listing process of Dongyue Feoeration’s spin-off and listing,and analyzes the influence of the spin-off and catalog on the parent and subsidiary in terms of market response,financial performance and non-financial performance.Firstly by analyzing the development background of spin-off and listing,the research content and innovation of this paper are introduced,and the existing relevant research on the concept,motivation and long-term and short-term economic consequences of spin-off and listing is systematically sorted out.Then,based on the theory of information asymmetry,financing demand theory,internal capital market theory and management incentive theory,the motivation and path of this spin-off and listing are analyzed.After that,it focuses on analyzing the comprehensive performance of the parent and subsidiary before and after the spin-off.Finally,the motivation and effect of the spin-off are summarized,and the enlightenment is derived.Through the analysis and collation of this case,the following conclusions have been drawn:first,the spin-off and listing of enterprises may be motivated by boosting valuation,obtaining independent financing status,enhancing financial transparency,and improving corporate governance.Second,the spin-off and listing may not bring a positive stock price effect to the parent company Dongyue Feoeration,and the market is not optimistic about the high-quality behavior of the parent company,but it maintains a positive attitude towards the independent listing of subsidiary,thus leading to a rational valuation of the feoeration.Third,the spin-off has a positive effect on both the financial and non-financial performance of the company,with significant improvement in the capital structure and economic efficiency of the company,while the listing enables the company to obtain capital to expand its business scale,increase investment in research and development,and improve the governance of its subsidiary,thereby maintaining the core competitiveness and sustainable development of the feoeration.Based on the above research conclusions,three enlightenments are summarized: enterprises should make decisions about spin-off and listing based on strategic planning and grasp the core of sustainable development;choose the right location and listing method;pay attention to potential risks and enhance their risk response capability.