The Research On Initiatives And Effects Of Equity Carve-out Of Shengyi Sci.Tech

With the establishment of the Science and Technology Innovation Edition and the gradual improvement of the equity carve-out listing system,equity carve-out listing has become a hot topic in China’s capital market in recent years.Before the implementation of the new regulations on equity carve-out and listing in December 2019,domestic companies can only choose to spin off their subsidiaries and list them overseas,while domestic case studies on equity carve-outs from A to A are still at a blank stage.Therefore,this paper selects Shengyi Sci.Tech,the first A-share company that spins off its subsidiaries to be listed on the Science and Technology Innovation Board,as the research object,and focuses on the following questions: Why did Shengyi Sci.Tech choose to equity carve-outs? What is the effect of the equity carve-out? What are the reference value for other companies that plan to equity carve-outs?This paper focuses on exploring the initiatives for the equity carve-out of Shengyi Sci.Tech in combination with the theoretical hypothesis of the equity carve-out,and comprehensively uses the event research method and financial index analysis method to analyze the market effect,financial effect,non-profitability of Shengyi Sci.Tech after the equity carve-out of its subsidiary and listing.Financial effects were tested.The research results show that the main reasons for Shengyi Sci.Tech’s choice of equity carve-out are to relieve the financial pressure of the parent and subsidiary companies,encourage the management of the subsidiary companies,improve the research and development capabilities of the subsidiary companies,expand the production capacity of the subsidiary companies,and reduce information asymmetry.The parent company Shengyi Sci.Tech has achieved a positive market effect after the equity carve-out,and its profitability and development ability have improved significantly after the equity carve-out of its subsidiary.Although its subsidiary Shengyi Electronics has improved its solvency to a large extent after its equity carve-out,due to the impact of the industry cycle,its profitability and operating ability have both performed poorly,causing its share price to fall for a time.The research inspiration and suggestions of this paper are as follows: First,whether the equity carve-out can obtain a positive effect is affected by a variety of factors.Enterprises that have the need for equity carve-out should comprehensively weigh the advantages and disadvantages,and make prudent decisions based on corporate strategy and market research.Secondly,after the equity carve-out,the technology innovation company should focus on improving its research and development capabilities,operational capabilities and governance capabilities in order to provide momentum for the company’s long-term development.Finally,under the current equity carve-out system,parent and subsidiary companies also need to build a sound information disclosure mechanism to reduce the potential risks brought by related party transactions.