Research On Motivation And Effect Of The Spin-Off Listing

With the maturity of a-share market,the attitude of regulators to China’s listed companies has changed from strict to encourage,and the a-share Market Supervision Model and registration system has been gradually improved in recent years.These objective signals have prompted Chinese listed companies to spin off with confidence.The a-share market then surged.In the past,there were two types of split listing in China: overseas listed companies split up their subsidiaries and list on the a-share market,and a-share listed companies split up their subsidiaries and list in Hong Kong.Over the next few days,a growing number of Chinese companies will spin off their subsidiaries and list on the a-share market.The case study object of this paper is Shengyi Electronic,a subsidiary of Shengyi Technology.In view of the shortage of existing literature,this paper puts forward its own research point of view,in order to strengthen the relevant research on China’s listed companies split listing,improve the relevant theoretical framework.Through the analysis of the typical cases of the first split listing in China,this paper discusses the process,motivation and positive effect of the split listing.This article through the case summary,for more a-share companies to provide experience and reference.This paper first reviews the literature on derivatives,then evaluates the contribution of this study and the adequacy and shortcomings of this study by comparing with the existing literature.Theoretically,the split listing is based on the existing literature.Second,this is the situation described.Then,this paper gives a comprehensive description of the reorganization,the process of listing,the arrangement of listing and the ownership structure after listing,which are all indispensable parts of the reorganization.The author then evaluates Shengyi Technology and Electronics.The motivation behind the spin-off can be used to determine whether it is in line with the macro policies of the capital market and the real need for company growth.This paper makes an in-depth study from the two dimensions of response effect of capital market and internal response effect of enterprises to evaluate whether the spin-off listing has positive effect and whether the motivation behind it can be realized.Through the in-depth analysis of this situation,the following conclusions are drawn: the internal and external motivation of the split listing is coordinated,with a certain logical link;Spin-off listing can produce favorable market effect for parent-subsidiary companies in a short time.The parent company’s announcement of a break-up triggered the strongest reaction in capital markets.To some extent,the incorporation of subsidiaries strengthens the framework of subsidiary’s governance,but does not enhance the efficiency of subsidiary’s governance.Through the split listing,the capital structure is optimized and the financing constraints of parent-subsidiary companies are eased.Spin-off not only improves the profitability of the parent company,but also enhances the core competitiveness of the parent-subsidiary company.The conclusion of this paper is as follows:Enterprises should pay attention to enhance endogenous growth capability,pay attention to the Upstream and downstream of the industry,strengthen supply chain management,make full use of funds raised by listing,and improve capital utilization ratio.