Study On The Motivation And Performance Impact Of The Spin-off And Listing Of Shengyi Technology

Spin-off is a process in which the parent company spins off part of its business or one of its subsidiaries for an IPO.It is beneficial for enterprises to obtain effective financing,improve the level of professional management,but also an important step for Chinese enterprises to go out and foreign enterprises to come in.In the past decades,due to the slow development and imperfect mechanism of China’s capital market compared with that of Western Europe,the form of spin-off has been limited,and the threshold conditions for spin-off listing are high and the standards are more stringent.As A result,there are few cases of spin-off companies in China,and there is also A lack of precedent for a-share companies to launch ipos in China through spin-offs.In August 2019,the China Securities Regulatory Commission(CSRC)publicly solicited opinions on the Provisions on The Pilot Measures for Listed Companies to Spin off their subsidiaries for Domestic Listing.The implementation of the regulations made it clear that "listed companies that have reached a certain scale can spin off their subsidiaries that have independent business and meet the requirements for listing on the Science and Technology Innovation Board in accordance with the law." In December 2019,China Securities Regulatory Commission(CSRC)issued and implemented the Provisions on Pilot Domestic Listing of Listed Companies By Splitting their Subsidiaries.Based on such economic background,this paper chooses Shengyi Technology as the research object of domestic listed companies spin-off their subsidiaries in the first share of domestic IPO(i.e."A spin-off A").Based on financing demand hypothesis,information asymmetry theory,business concentration hypothesis and other relevant theories,Using entropy-top SIS,grey correlation degree analysis and event study method to analyze the impact of spin-off on the financial performance and capital market of Shengyi Technology,and the motivation of whether to achieve spin-off listing.In order to find out whether Shengyi Technology has achieved value realization after its spin-off and listing,this paper firstly selects the financial index data of the last four years and analyzes it from four perspectives: profitability,operating capacity,development capacity and debt paying capacity.The entropy weight method is used to get the weight of each index,and then top SIS analysis is carried out according to the weight,and the conclusion is that the financial performance ranking of enterprises has been improved after the separation.Secondly,the industry with the top five second-level total income of Shenwan is selected and compared with the industry by using grey correlation analysis.It can be seen that the industry ranking of Financial performance of Shengyi technology has risen after the spin-off and listing.Thirdly,using the event study method to obtain the spin-off listing event in the capital market to obtain excess returns,the market reaction is positive.Through significance test,it is found that the excess returns in the second window period are not significant,which further studies the possible reasons for the non-significant response in the window period.Finally,based on the above analysis,this paper draws the conclusion that spin-off improves the financial performance of Shengyi Technology,improves the competitiveness of the industry,makes the parent company’s capital market obtain excess returns after spin-off,and realizes the motivation of spin-off.It also proposes that spin-off listing should ensure the independence of the company.Spin-off listings should not be regarded as a money-laundering tool and regulators need to properly review spin-off listings.