Research On Motivation And Performance Of Continuous Asset Divestiture Behavior Of Huatian Hotel

In recent years,China’s macro economy has been under significant downward pressure due to multiple factors,such as the global economic slowdown and trade frictions,which have created more challenging market competition,cost control,and funding flows for some enterprises.Due to its ability to quickly improve performance,asset divestiture has become increasingly important and widely implemented by Chinese listed companies.Against this background,the impact of asset divestitures on corporate performance has become a research hot topic.This paper uses case analysis,comparative analysis,and event study methods to select Huatian Hotel’s continuous asset divestitures implemented between 2017 and 2021 as a research case,analyzing the motivations behind the divestitures in conjunction with the company’s business strategy and external environment.The paper evaluates the effects of asset divestitures on the hotel’s financial and market performance.The study finds that the ineffective results of diversified operations and continuous losses put the company at risk of delisting.To avoid delisting,the company adopted asset divestiture strategies and gradually formed a re-consolidation strategy in the process.Additionally,the outbreak of the COVID-19 pandemic also accelerated the company’s asset divestiture process.During the divestiture period,Huatian Hotel’s financial indicators in multiple dimensions did not improve,and financial performance was poor.The reason behind this was that the company failed to make good predictions of market reactions,and a series of consecutive divestiture transactions that were excessive and reckless conveyed negative signals about the company’s operating conditions to external investors,leading to negative market reactions and a decline in shareholder wealth.This study indicates that companies should adjust their business strategies scientifically,consider the overall impact of divestitures,and attach importance to investor relations management.At the same time,regulatory agencies,investors,and other stakeholders should fully recognize the market risks that corporate asset divestitures may bring and respond to them appropriately to avoid losses.