Research On Value Creation Effect Of Spin-Off And Listing

With the diversified development of the Internet era,many Internet companies have begun to enter different business areas to seek comprehensive development and risk diversification.However,due to the special nature of the constantly updated and iterated business in the Internet industry,the costs of research and development,management,and sales of enterprises are constantly increasing,which exacerbates the difficulties of funding supply and business development.To alleviate this problem,many companies have begun to engage in asset restructuring,including spin-offs for listing.However,due to the stricter regulation of China’s capital market,spin-offs for listing started later in China than in developed countries and there is still a gap compared to foreign markets.In recent years,with the implementation of relevant policies,the China Securities Regulatory Commission has greatly reduced the threshold for spin-offs for listing,providing opportunities and platforms for Internet companies such as Kingsoft,and the development of spin-offs for listing is just in time.Therefore,research on spin-offs for listing is also of great significance.Kingsoft is a leader among Internet companies in China.Since its listing in Hong Kong in2007,in addition to operating online game business,it has also launched software such as WPS,Kingsoft Power Word,and Kingsoft Internet Security,rapidly expanding its market share.In response to the development trend of the times,Kingsoft has also entered the cloud services industry and cutting-edge areas such as AI.In order to meet its own development strategy,Kingsoft split off its high-quality subsidiary Kingsoft Office and successfully listed it on the newly established Science and Technology Innovation Board in 2019.Kingsoft Office’s main WPS Office business is well-known and is the benchmark for domestically developed office software in the industry.Both Kingsoft and Kingsoft Office have a certain influence and demonstration effect in the industry.Therefore,in order to study the effect of spin-offs for listing on the value creation of the parent company,this paper takes this case as the research object.This paper first reviews relevant literature at home and abroad,and then explains the basic concepts and theoretical basis,analyzes the impact path of spin-off listing on value creation.Secondly,Kingsoft and Kingsoft Office are introduced,and the motives for the spin-off and the process of the spin-off are analyzed.Thirdly,this paper calculates the market value creation effect of Kingsoft through the event study method and Tobin’s Q value,and studies the financial value creation effect of Kingsoft through the EVA value evaluation model and the traditional financial analysis method.The conclusion is that Kingsoft’s market value creation is basically realized,and the financial value creation effect is not obvious,but the motives for the spin-off are basically satisfied.Finally,this paper also provides several inspirations for Kingsoft,companies with spin-off intentions,and regulatory authorities,including paying attention to the cultivation of value creation capabilities,focusing on the latest policy adjustments and strategic deployment,scientifically selecting listing boards,and improving laws and regulations,hoping to provide references for all parties.