Research On The Motivation And Performance Of Domestic Spin-offs And Listing Of Pharmaceutical Enterprises

In the 1980 s,the spin-off as a means of resource reallocation was the first wave in the western countries.While China is limited by immature capital market and imperfect related system,it was only after Tongrentang spun off Tongrentang Technology to Hong Kong GEM in 2000 that the term spin-off gradually began to be recognized by enterprises.With the transformation and upgrading of China’s economic and financial structure,the country vigorously promotes the deepening of financial supply-side structural reform and optimization of resource allocation.The SFC established the STB and implemented the registration system in March 2019,allowing eligible subsidiaries to be spun off and listed on the STB,and issued[2019] No.27: "Certain Provisions on Pilot Domestic Listing of Subsidiaries of Listed Companies Spun Off" in December of the same year.In the context of this new regulation,studying whether the motivation of domestic spin-offs and their impact on corporate performance can achieve the effect of "1+1>2" can provide new ideas for China’s listed companies to transform their development strategies.Based on the background of the deepening reform of domestic A-share securities market,this paper firstly compares the literature related to spin-offs using literature research method,and defines the concept of spin-offs based on the theoretical basis of financing strategy and management incentive hypothesis;secondly,it introduces the development status and trend of China’s pharmaceutical industry,and summarizes the characteristics of China’s pharmaceutical enterprises and their spin-offs based on the current domestic spin-offs of China’s pharmaceutical enterprises.This paper selects the case of Changchun High-Tech spin-off of Bcht Biotechnology(the pharmaceutical and biological industry of its parent and subsidiary,which is an emerging industry of the national "13th Five-Year Plan" strategy)and analyzes the compliance of Changchun High-Tech domestic spin-off,the motivation of the spin-off and its listing process by applying the case study method;and then uses the event Then,we analyze the short-term performance of Changchun High-Tech before and after the spin-off by using the event study method,and the long-term performance of the case company before and after the spin-off by using the indicator analysis method from the financial and non-financial dimensions to explore whether the spin-off can achieve the purpose of corporate financing and whether it has a positive effect on the short-term and long-term performance of the company.Unlike the financial performance evaluation methods used in other spin-off studies,this paper uses factor analysis to construct a financial evaluation system that combines the characteristics of Changchun High-Tech industry to comprehensively evaluate the performance changes of the domestic spin-offs,making the analysis more comprehensive,integrated,and relevant.Finally,the case is summarized and recommendations are made at three levels: enterprise,pharmaceutical industry and market financial regulation.Through the analysis of the case of Changchun High-Tech spin-off of Bcht Biotechnology,the following conclusions are drawn: first,the spin-off improves the market value and intrinsic value of Bcht Biotechnology,but the short-term performance of the spin-off will not be long-lasting if the funds raised are used for investment purposes.Third,the spin-off allows Changchun High-Tech to focus on its core business operations,and the subsidiary has the capital to increase its R&D and enhance its core competitiveness and market influence;fourth,the spin-off reduces information asymmetry,improves the internal governance structure and management incentive system of the subsidiary,and strengthens its governance and supervision capabilities.Based on the above findings,the following recommendations are made: First,before the spin-off,companies should choose the spin-off target and the listed segment reasonably based on their development strategy objectives.After the spin-off,they should improve relevant information disclosure,reduce connected transactions,and improve their own professional management capabilities;second,pharmaceutical companies should respond positively to the global trend of pharmaceutical innovation development,spin-off and list for the purpose of practical needs,select boards with corporate characteristics,maintain core competitiveness with continuous innovation,drive strategic goals with highly skilled personnel,and establish multi-party interaction to explore industrial innovation foreword and jointly promote Pharmaceutical industry transformation and innovation upgrade;Third,financial market supervision should clarify the spin-off process,actively guide and regulate the spin-off of listed enterprises,improve laws and regulations,safeguard the legitimate interests of relevant stakeholders,and give full play to the role of market supervision.