The Motivation And Performance Analysis Of China Resources Land’s Split And Listing Of China Resources Vientiane Life

Derivatives and listing have been a common method in the international capital market for the past several years,which has been highly mature in foreign countries,but it was not brought to China’s attention until 2000.After more than 20 years of rapid development,China’s property industry has entered a stage of slow growth and near saturation due to funding restrictions and a period of decline in the golden era.Real estate companies are looking for new points of economic growth in such a situation,and trying to expand funding,improve operations,and change development strategies through spin-offs and listings.There were two outbreaks of spin-offs and listings in the real estate market in 2019 and 2020,but should the company be spun off? What will happen to the spin-off? To address these issues,this paper performs a comprehensive analysis and evaluation of the firm’s performance in the aftermath of spin-offs,with the goal of providing a benchmark experience for other companies.This paper uses China Resources Land’s spin off from China Resources Vientiane Life as a case study.First,we review national and international research on spin-offs and listings,in the following sections we define the concepts and types of spin-offs and listings and explain the relevant theories.It then draws together the current development of China’s real estate management industry,as well as the antecedents and necessities of the spin-offs and listings of real estate companies,and innovatively analyzes the impact mechanism of real estate firms’ spinoffs and listing returns.In this analysis,drawing upon the stance of China Resources Vientiane Life itself,finds that its motivations for spin-offs and listings include primarily the enhancement of funding capabilities and the expansion of funding channels;reducing information asymmetry and enhancing firm value;improving strategic layout and enhancing core competitiveness;and optimizing governance structure and strengthening managers’ incentives.The sample firms and case firms of A+H-share real estate companies are then selected for spin-offs and the properties are listed for analysis of the market effect of their spin-offs and listings,and finds that spin-offs and listing can indeed lead to positive excess returns to the firm;EVA is also analyzed alongside the financial and non-financial performances of China Resources Vientiane Life.Taking the analysis as a starting point,she finds that spin-offs and listing have not increased the economic value-added of both parent firms and subsidiaries,but the profitability and operating capacity of Poly Property Management Co.,Ltd.was greatly increased after the spin off and listing of the company was completed.On the basis of non-financial indicators,however,Poly Property has optimized its governance structure,expanded its scale of operation,and improved its strategic configuration.The paper concludes with a summary of the research findings and draws lessons and insights from the firm level,which may serve as a reference for other listed real estate companies...