A Case Study Of CIMC’s Spin-off And Listing Of CIMC Vehicles

With the rapid development of social economy,enterprises usually adjust their development strategy in time to better match their business structure according to the changes of market competition environment and market demand.Before the 1980 s,the development strategy of diversification was sought after by foreign enterprises.These enterprises believe that diversification can not only bring more benefits to enterprises,but also reduce their business risks to a certain extent.However,diversification will also have some negative effects on enterprises.Therefore,some enterprises began to turn their attention to appropriate and reasonable strategic contraction methods such as spin off listing and share repurchase.In the1980 s and 1990 s,the United States began to be popular with a new way of asset restructuring-spin off and listing.Due to the early development of foreign capital markets and the relatively perfect rules and systems,investors in foreign capital markets have a strong ability to accept the asset restructuring method of spin off and listing.Therefore,enterprises have successively achieved the strategic goal of diversified operation through spin off and listing.With the enrichment of practical experience,the theoretical research on spin off listing abroad is becoming more and more mature.In China,since domestic enterprises began to implement the joint-stock reform and listing,the development of the capital market has become increasingly active.From the overall situation of the capital market,many restrictions in the domestic capital market are difficult to meet the large-scale development and expansion needs of listed companies.In addition,affected by international trade friction,the independent listing of overseas spin off subsidiaries has become the expansion strategic choice of many group companies,"Shanghai Hong Kong stock connect" The opening of "Shenzhen Hong Kong stock connect" provides many policy convenience for the company to connect with the overseas capital market.Many domestic group companies try to optimize the internal capital structure of the group,achieve the effect of capital internationalization,promote the overall development and growth of the group,and then enhance the overall value of the group.In order to explore the motivation,effect and market reaction of the group company’s spin off listing,this thesis selects the case of CIMC’s spin off subsidiary’s independent listing in Hong Kong under the background of "Shenzhen Hong Kong stock connect",and analyzes the motivation,operating effect,financial effect and market reaction of CIMC’s spin off and overseas listing of CIMC Vehicles.Through the analysis,it is found that meeting the needs of large-scale financing,improving market share and obtaining higher market valuation are the main motivation to promote CIMC’s spin off listing,and the independent listing of the spin off subsidiaries abroad is a feasible strategy to promote the motivation.Through the spin off and listing,the financing effect of CIMC Vehicles is obvious,and the investment in R&D is increased;Due to the impact of the COVID-19 on the global economy,the group split up and centralized Vehicles to be listed independently overseas.Generally speaking,the positive financial impact of the parent company is slightly greater than that of the subsidiaries,and more positive financial improvements are reflected at the group level;The response of the capital market to the overseas independent listing of Vehicles in the group’s spin off is not as strong as that in previous years,which is mainly related to the relatively negative investment mentality of investors and changes in the capital market environment.Finally,combined with the operation effect,financial effect and market reaction and impact of spin off listing on the group and its spin off subsidiaries,this thesis summarizes the experience of the group spin off behavior,and provides three enlightenment to the company’s spin off listing behavior: first,the spin off listing should meet the strategic needs of the enterprise itself;Second,reasonably select the domestic and foreign spin off markets;Third,pay attention to the long-term development of parent and subsidiary companies after spin off and listing.The study of this thesis can not only point out a new direction for the study of the listing of spin off subsidiaries of listed enterprises,but also put forward a new theoretical perspective for the understanding of spin off listing.At the same time,it can also provide reference and reference for other enterprises to choose spin off,so as to enrich the way of asset restructuring for Chinese enterprises and provide management suggestions for enterprises to realize value growth by using spin off listing.From the perspective of macro policy,the research of this thesis also helps to promote the regulators to further improve the current supervision and management system,which is undoubtedly of great practical significance to improve the function of Chinese capital market.