Research On M&A Performance Of Citic Special Steel Based On Supply-Side Reform

As a major manufacturing country,the steel industry is an important economic pillar industry in China.However,with severe environmental pollution,sustained economic downturn,and saturation of the manufacturing industry,China’s steel industry has gradually shown problems such as excessive product manufacturing,weak profitability,dispersed industrial chains,and insufficient research and innovation capabilities.In order to solve this series of problems and promote the transformation and upgrading of economic models,the central government has proposed a "supply side reform" plan,with the steel industry as the primary pilot for supply side reform,mainly through mergers and acquisitions,optimizing steel production methods,achieving resource restructuring,and enhancing economies of scale.Firstly,this article focuses on sorting out relevant literature on supply side reform both domestically and internationally,and then introduces relevant references on M&A motivations and performance.Then,the current development status of China’s steel industry was introduced,with a focus on analyzing the motivations for CITIC Special Steel’s merger and acquisition.Next,when analyzing and evaluating the financial performance of M&A,we use the event study method to compare the profitability before and after the M&A,and draw the conclusion that the M&A has improved the short-term performance of CITIC Special Steel;At the same time,using traditional financial indicator analysis methods,analyze the four financial indicator capabilities of enterprises before and after mergers and acquisitions from 2017 to 2021,The results show that the profitability and development ability of the enterprise have been enhanced to a certain extent after the merger and acquisition,and there are shortcomings in the development of debt repayment and operational capabilities,but they are gradually improving in the future;Afterwards,the EVA index was used to evaluate the performance of enterprise mergers and acquisitions,and the overall results were also optimistic;Finally,using the five major tasks of supply side reform to analyze the performance of CITIC Special Steel’s mergers and acquisitions,it was found that the company’s ability to destock and reduce production capacity still needs to be improved.In response to these issues,some countermeasures and suggestions on how to improve CITIC Special Steel were proposed,and experience and inspiration were gained.