Study On The Motivation And Effectiveness Of The Spin-off Of Poly Property By Poly Development

After the rapid development of China’s real estate industry,excessive housing prices and serious speculation have led to the emergence of a large number of economic bubbles.Subsequently,in the environment of multiplying economic downward pressure,the intensification of competition in the industry and the tightening of relevant policies made China’s real estate enterprises under pressure,their business expansion slowed down,profitability declined,and China’s real estate industry entered the era of "stock assets".At the same time,the development of urbanization and the improvement of people’s requirements for daily life have led to an increasing demand for property management services,as well as higher requirements for the richness of property management services and residents’ satisfaction,so property management still has more room for development and a bright future.Against this backdrop,Fantasia listed its property subsidiary Colour Life Services in 2014,which was the first case of a real estate company splitting its property segment or subsidiary to go public in China.Since then,many real estate enterprises have chosen to spin off their property segments or subsidiaries and list them separately.Poly Development also followed the trend and Poly Property officially terminated its listing on the New Third Board on April11,2019,while a month later,Poly Development announced its intention to let Poly Property go public in Hong Kong.on August 8,2019,Poly Development announced that it had submitted an application for listing Poly Property and related information to the Hong Kong Stock Exchange.Subsequently,Poly Property was successfully listed on the Hong Kong Stock Exchange on December 19,2019.Based on summarizing the relevant research results of previous authors,this thesis adopts the case study method,financial index analysis method and event study method to analyze around the spin-off of Poly Development to list Poly Property.Firstly,we analyze the development of Poly Development,Poly Property and the industry in which they are located,and the process of the spin-off.The effects of the spin-off on both the parent company Poly Development and the subsidiary Poly Property are analyzed.The study finds that the reasons for the spin-off of Poly Property are: industry development,undervalued properties,reduced capital pressure,and increased business concentration.In terms of short-term effects,the market has given positive feedback to Poly Development’s spin-off of Poly Property.In terms of long-term effects,the spin-off of Poly Property from Poly Development has had a significant impact on Poly Property,enhancing its capabilities in various aspects,creating value for it through its governance effect,financing effect and operating effect,releasing its huge latent development capacity and making its future promising;Poly Development’s overall development is mainly influenced by the external environment and its own operation,etc.The spin-off of Poly Property from Poly Development has had a significant impact on The overall development of Poly Development is mainly affected by the external environment and its own operation,and the impact of the spin-off of Poly Property on the overall operation and development of Poly Development is relatively limited,and the value created for Poly Development is relatively limited.Accordingly,three insights are drawn for real estate enterprises and property management companies that have already listed their properties: choose the spin-off in light of their own situation,choose a suitable path for the spin-off,and focus on improving their professional capabilities after the spin-off.