Analysis Of The Motivation And Performance Of Wasion Holdings Spin-Off Willfar Information Listing

In the 1960 s and 1970 s,the wave of diversification expansion arose in the United States,many enterprises realized the purpose of diversification through establishing new business,mergers and acquisitions,etc.However,the continuous expansion of the business makes subsidiaries have increasingly strong demand for funds,and blind expansion may also breed problems such as low governance efficiency,slanting allocation of resources and poor accuracy of market valuation.Therefore,in order to solve the above problems,the capital operation mode of spin-off listing which is gradually pursued by western capitalist countries appears.Generally speaking,spin-off listing has many advantages,such as improving the liquidity and value of the shares of the spin-off subsidiary and meeting the company’s financing needs.However,there may also be some problems,such as the failure of spin-off due to the difficulty of operation in practice and the poor business development of the spin-off subsidiary.Due to the clear regulation of Chinese regulatory layer on domestic spin-off listing only from 2019,compared with foreign countries,Chinese spin-off listing cases are very little before2019,and the cases that can be studied are mainly concentrated in the more successful and typical Tong Ren Tang,Tongfang Shares,Yonyou,etc.,which also leads to the depth and breadth of domestic scholars’ research on spin-off listing is far less than that of foreign countries.Recently,due to the clear policy of spin-off listing and the Science and Technology Innovation Board’s approval of spin-off listing,spin-off listing has rapidly become a hot topic in China,and become one of the beneficial exploration ways for subsidiaries to achieve sustainable development in the fierce competition.Especially for high-tech subsidiaries,the overall investment in research and development is large,and the development capital is higher than that of other subsidiaries.It is difficult to meet their huge development capital needs only with the resources of the parent company,so the demand for funds through spin-off and listing is also stronger.Willfar Informatioan is a high-tech enterprise engaged in energy Internet.On January 21,2021,Willfar Information was successfully split from the parent company Wasion Holdings and listed on the Science and Technology Innovation Board,becoming the first stock listed on the Science and Technology Innovation Board of energy Internet,which caused a huge response in the industry.Therefore,this paper makes an in-depth discussion on the spin-off and listing case of Willfar Information,in order to enrich the relevant research on spin-off and listing in China,and provide reference for the spin-off and listing of other high-tech enterprises,which has certain theoretical and practical significance.In this paper,the second successful case of Hong Kong stock spin-off and domestic listing of Wasion Holdings’ spin-off of Willfar Informatioan is selected as the case study object.Under the foundation of core-oriented strategy,financing needs,information asymmetry and theoretical basis of management incentive,event study method,financial and non-financial performance analysis method are comprehensively applied.This paper focuses on the motivation of the spin-off listing of Willfar Information and its performance after the spin-off listing.The article is discussed from five parts.Firstly,it introduces the research background and significance of this paper,reviews the relevant references on the motivation and performance of spin-off listing,and summarizes the writing framework of the whole paper.Secondly,this paper introduces the concept,mode and type of spin-off listing,theoretically explains the motivation and performance evaluation method of spin-off listing,and expounds the four basic theories of spin-off listing.The following is a detailed introduction to the spinoff and listing case of Willfar Informatioan,including the basic information of the spin-off party and the demerged party,the motivation for Wasion Holdings to spin-off Willfar Informatioan,the specific mode and type of the spin-off,the process of the spin-off and the reasons for the success of the spin-off.This paper analyzes the performance of Willfar Informatioan spin-off listing,evaluates the short-term market reaction,financial performance and non-financial performance of Willfar Informatioan before and after the spin-off by using event research method,financial index and non-financial index evaluation methods,and analyzes the reasons for the changes.Finally,combined with the analysis,this paper sums up the conclusion of the case study and the corresponding enlightenment.After relevant research and analysis,this paper mainly draws three conclusions: first,strategic needs and the implementation of registration system jointly promote the spin-off and listing of Willfar Information;Second,business independence and good prospects of Willfar Informatioan are the basis of success of spin-off;Third,the market value of Willfar Informatioan has been released after spin-off listing.Based on the above three conclusions,this paper also summarizes three enlightenments for other companies planning to spin-off.First,spin-off listing should fit the company’s development strategy and seize the policy opportunity to go public quickly;Secondly,the subsidiary with independent business and good prospect is preferred as the object of spin-off,so as to guarantee the long-term competitive advantage of the subsidiary after spin-off.Finally,after the spin-off and listing,we should make reasonable use of the funds raised to seek long-term development and enhance our core competitiveness.