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The Carve-Outs And Value Creation Study Of Shengyi Technology

Posted on:2024-09-19Degree:MasterType:Thesis
Country:ChinaCandidate:Y J JinFull Text:PDF
GTID:2569307067496174Subject:Finance
Abstract/Summary:PDF Full Text Request
The policy basis for domestic spin-offs is being gradually improved with the introduction of the "Certain Provisions on Pilot Domestic Listing of Subsidiaries of Listed Companies" at the end of 2019,which has led to a wave of "A to A" spin-offs in China.This has led to a wave of domestic "A to A" spin-offs.For companies,it is worthwhile to explore how value is created after the spin-off and how companies can successfully spin-off and overcome the risks associated with the spin-off,thus gaining positive value creation.Bio-Tech was the first company to complete an "A to A" spinoff and achieved significant value enhancement in the short term after the spin-off,but the company’s medium to long term development was unexpectedly hampered,exposing new problems.Therefore,this paper selects the case study of the spin-off of Shengyi Technology,analyses the process of the spin-off and the real motivation for the spin-off,and evaluates its value creation effect.The short-term value creation of the company is mainly demonstrated by the event study method using the overage return on share price,while medium and long-term value creation of the company is measured by Tobin’s Q and financial performance.It is found that the spin-off has significantly increased the share price yield of the parent company.In the short term,sending a positive signal to the market;on the other hand,the Group’s financing ability and short-term financial performance have also been significantly and positively enhanced.However,the medium and long-term value creation brought by the divestment to the Group was not satisfactory,and the financial performance of the Group declined in the medium and long-term,so the divestment did not fundamentally improve the business performance and create long-term value for the company.Accordingly,this paper suggests that Shengyi Technology needs to consolidate its operating performance on the one hand,and adopt a flexible strategic approach on the other,as well as maintain a continuous breakthrough and internalised upgrading model to achieve long-term value creation.The findings of this paper can also serve as a reference and reference for companies that intend to undertake a spin-off in China.
Keywords/Search Tags:Shengyi Technology, Equity Carve-outs, Value Creation, Test and Evaluation
PDF Full Text Request
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