Research On The Value Effect Of Waigaoqiao’s Spin-Off Listing

In recent years,due to the further advancement of my country’s reform and opening-up policy,enterprises have adopted various asset restructuring methods to carry out reforms in order to seek breakthroughs.As a shrinking asset restructuring method that has already matured in the United States and other European and American countries,equity Carve-Outs have been enthusiastically sought after by enterprises in China.Among them,the spin-off listing method of type A split A has gradually become the main choice for domestic enterprises.The main reason is the improvement of market and policy base conditions.Based on the current situation and expectations of equity carve-outs in my country,The case of Waigaoqiao’s spin-off was carried out to study the value effect of equity carve-outs,and to provide reference for other companies planning to carry out spin-off listing,especially adopting the method of A split A.This paper firstly analyzes the motivation of Waigaoqiao’s spin-off of Changlian shares,and concludes that expanding financing channels,specializing in core business,management incentives and reducing information asymmetry are the main reasons for the equity carve-outs.And based on the theoretical basis of value creation through spin-off listing,it mainly analyzes the value effect from three aspects: operation,financing and governance.The study found that: in the capital market,Waigaoqiao and Changlian have obtained two different reactions,negative and positive,respectively,in the short-term market reaction.In terms of operating effects,the core competitiveness of Waigaoqiao’s real estate business has been enhanced after the spin-off,and Changlian has optimized its business structure on the basis of stabilizing business development;In the year of spin-off and next year,Changlian’s profitability and growth ability was improved,but then there was a significant decline.The operating capacity was significantly weakened after the equity carve-outs,and the subsequent improvement effect did not meet expectations.In terms of financing effect,Changlian shares obtained funds through spin-off listing,which promoted the business development of Changlian shares and realized the company’s strategic layout.It also expanded financing channels and further optimized the capital structure.The governance effect of Changlian shares is obvious,it not only realizes the incentives of management and core technical personnel,but also reduces the concentration of shareholders.The introduction of external investors is conducive to the formation of effective external supervision of corporate governance.Finally,through the overall calculation of EVA,it is concluded that the equity carve-outs have brought obvious value creation to Waigaoqiao and improved the company’s value;while Changlian shares have significantly increased in value in the year of spin-off,then the subsequent value creation trend failed to sustain.Based on the above case analysis and summary,this paper believes that it’s more suitable to choose spin-off listing as a way of corporate reform,when the parent company’s business is diversified and its subsidiary’s business is promising.Besides,companies whose main business is significantly different and are not in the upstream and downstream chains also is a favorable advantage.In addition,after the successful spin-off listing,it is necessary to effectively supervise the use of the raised funds in order to maintain continuous value enhancement.Therefore,the research value of this paper is to form an analysis of the value creation of spin-off listing from a new perspective,which enriches the research cases of my country’s A split A method,and also provides reference and management suggestions for other companies that plan to use spin-off listing to realize value creation.