Research On The Motives And Economic Consequences Of The Spin-Off Of Willfar Information Technology Co.,Ltd. And The Listing Of Wasion Holdings Ltd.

The spin-off IPO is an important form of corporate asset restructuring that effectively integrates corporate resources and enhances core competitiveness.In 2019,the China Securities Regulatory Commission allowed eligible companies to list through the Science and Technology Innovation Board(STAR Market)spin-off IPO,which attracted a large number of companies willing to return to the domestic capital market through spin-offs.It is evident that the spin-off IPO to the STAR Market has gained popularity.As one of the first companies to successfully list its spin-off on the STAR Market,Willfar Information Technology Co.,Ltd.(Willfar)has proven that this approach is feasible.This article combines the characteristics of the STAR Market to analyze the reasons for Wasion Holdings Ltd.(Wasion)to choose to spin-off Willfar for a separate listing,to select the STAR Market as the listing location,and the economic consequences of the spin-off IPO.Through research,it is concluded that,firstly,the reason for the spin-off IPO of Wasion was due to the poor performance of the parent company’s stock price and financial condition,as well as the subsidiary’s faster development speed and increased financing needs.Based on the characteristics of the capital market and the subsidiary’s technological innovation attributes,the STAR Market was chosen for listing.Secondly,after the spin-off IPO,the parent company’s stock price remained stable,the subsidiary’s stock price doubled,and both the parent and subsidiary companies achieved positive excess return rates and cumulative excess return rates.The independence of the parent and subsidiary companies was enhanced,and financing,investment,and operational efficiency were improved.Thirdly,the increase in economic value added and Tobin’s Q also reflects that the spin-off IPO promoted the increase in enterprise value.Related recommendations are proposed.Firstly,fully utilize institutional innovation opportunities to seize the first-mover advantage in the STAR Market.Secondly,select competitive businesses for spin-offs to achieve business diversion and optimization.Thirdly,after the spin-off IPO,a long-term development strategy should be reasonably formulated,and financing funds should be used prudently.This study differs from previous ones in two ways.Firstly,it adopts a unique research perspective by conducting a comprehensive analysis of the economic consequences of IPO spin-offs from the perspectives of timing,choice of listing board,market performance,firm value,and economic activities.Secondly,it employs various models,such as Economic Value Added(EVA)and Tobin’s Q,in conjunction with the event study method to assess the economic consequences of IPO spin-offs from multiple angles.The significance of this study lies in providing new perspectives and approaches for related research on STAR Market IPO spin-offs in China,as well as offering experience and inspiration for companies planning to list on the STAR Market through IPO spin-offs.