Performance Study Of The Equity Carve-outs Of ShengYi-Electronics Company From ShengYi-Technology Company For Domestic Listing

With the entry into the new era of socialism with Chinese characteristics,China’s economy has developed well,the number of listed companies has continued to increase,and the company’s asset scale and business segments have also continued to expand.However,the diversification of management reduces the management efficiency of the enterprise and makes the internal resource allocation unreasonable,and the negative synergies between industries appear together.As one of the means of asset shrinkage,equity carve-outs is suitable for the process of divesting non-core assets and core business of enterprises.Enterprises can improve negative synergies through equity carve-outs,help themselves transform their business development methods,and achieve high-quality development.Due to the stricter supervision on equity carve-outs in my country before,the development of domestic equity carve-outs has been slow in China with few cases.In March 2019,my country newly established the Science and Technology Innovation Board.At the same time,domestic listed companies are allowed to spin off their subsidiaries and list on the Science and Technology Innovation Board.Listing as a means of shrinking assets is highly sought after by listed companies.As of December 31,2021,105 A-share listed companies have issued equity carve-outs announcements,and 20 Hong Kong-listed companies plan to spin off their subsidiaries to A-share listings.The subject of this article’s case study,Sheng Yi-Electronics,was registered and effective on January 5,2021,becoming the first domestic company to successfully spin off from the main board to the Science and Technology Innovation Board,and also the first successful spin off listing on the A-share market.Therefore,this thesis makes a case study on the first case of the shareholding structure of the main board,the shareholding structure of the Science and Technology Innovation Board,that is,the motivation and performance of Sheng Yi-Technology’s spin-off and listing of Sheng Yi-Electronics,in order to provide relevant information for listed companies to choose to spin off and list in China in the future.Learn and guide.This thesis analyzes cases through literature research,event research method and other methods.First,it introduces the relevant theories of equity carve-outs,including the definition and classification of equity carve-outs,mode and motivation theory.Then it introduces the basic situation of the case company,the process of equity carve-outs,and the reasons for its choice of equity carve-outs.Finally,through the event research method,financial index analysis and non-financial index analysis,the three aspects of the performance of Sheng Yi-Technology’s spin-off of Sheng Yi-Electronics are studied,including the stock price effect,financial performance and non-financial index performance,in order to obtain a comprehensive and accurate analysis of the spin-off listing.The impact of listing on the performance of parent companies and subsidiaries,and put forward corresponding recommendations from the perspectives of parent companies,subsidiaries and regulators.After analysis and research,this thesis draws the following conclusions:(1)There are five main reasons why Sheng Yi-Technology chose to spin off and go public.Information asymmetry allows market investors to fully understand the company and enhance the company’s market value;the third is to divest subsidiaries of non-core businesses,so that the parent company can focus on core businesses and improve resource utilization efficiency;the fourth is to motivate the management of subsidiaries Actively participate in the management of the company and improve the management efficiency of the company;the fifth is to enjoy the policy benefits of the Science and Technology Innovation Board and seize the opportunity.(2)The equity carve-outs brought investment returns to the parent company and obtained excess rate of return;at the same time,the equity carve-outs also improved the financial indicators of the parent and subsidiary companies,and enhanced their operational and development capabilities;in terms of non-financial indicators,the equity carve-outs will improve the brand effect,innovation ability and human capital.Based on the research and analysis of the equity carve-outs of Sheng Yi-Technology,this thesis puts forward corresponding suggestions from the perspectives of the parent company,subsidiary companies and regulators.From the perspective of the parent company,it is necessary to clarify its own motivation for equity carve-outs,and to determine the subsidiaries to be spin-off.For subsidiaries,it is necessary to adjust their own internal governance structure and improve the information disclosure system.From the perspective of regulators,while actively guiding the spin-off of listed companies,it is necessary to strictly supervise the equity carve-outs,and protect the interests of market investors.