A Study On Chinese Group Companies' Holistic Listing

Due to some historical reasons, the majority of Chinese publicly listed companies were born of some high-productive capital from their mother companies and from spin-off listing. Such a method leaves a lot of problems for the listed companies' standard operation and a lot of serious problems for China's stock market. Thus, it is important for the securities market to initiate a most basic institutional innovation to solve such a historical issue. That's the institutional requirement for China's stock market to make progress to a higher level.Since 2004, many group companies like TCL Group,Wu Gang Co. Ltd,Shang Gang Group have successively realized holistic listing through the existing platform of its affiliated listed company. There are few companies realize holistic listing before the reform of non-tradable shares. After the reform of non-tradable shares, more and more groups and big companies wish to realize holistic listing. The atmosphere of holistic listing fulfilled the whole stock market of China.Against the background of full-circulation, it is quite important to make a systemic research on holistic listing from theory to practice and analyze the influences on China' stock market and companies that holistic listing brings, giving some advice on holistic listing for Chinese large companies.There are six parts in this paper. The fist part demonstrates the concept of holistic listing and the background of holistic, points out that holistic listing is the need of institution reform of China's stock market. In the second part, we use Economies of Scale Theory, Transaction Cost Theory and Synergy Effect Theory to explain holistic listing. In the third part, three modes of holistic listing are listed: buying the parent company's assets, merger between two listed companies and merger between parent company and its subsidiary company. In the fourth part, we analyze the advantages and disadvantages of holistic listing. Holistic listing will expand the overall size of listed companies, reduce affiliated transactions and improve concentration, however it will make the problem of One Big Shareholder even worse. We analyze the effect of holistic listing in the fifth part, focusing on the impact of value transfer on the price of stock. In the sixth part, we list the conditions of holistic listing, giving some advice to the companies which wish to realize holistic listing.