Empirical Research On Modes Of Holistic Listing And Its Influence On The Company

The IPO market of China experienced the institutional change from approval system to authorized system. Under the authorized system, in order to balance the interests of all parties, listed companies had to divest some assets which with good development prospects, sustainable business ability, and higher profitability from the overall assets. It is very normal in listed companies’early practice. With the continuous development of China’s capital market, investors growing awareness of self-protection, this practice reveals the transfer of the financing, the remaining profits of listed companies by controlling shareholders, and resulting the loss of state assets, the failure of state-owned assets commission-agent, the unsound of large related party transactions and corporate governance structure and many other issues, which infringes on the interests of small investors.In order to solve these problems, China promulgated a series of policies on holistic listing market. On January 2004, TCL achieved holistic listing by merger its subsidiary, and created a precedent for China’s enterprises. Practice has proved that this approach is conducive to make a company bigger and stronger, help to protect the interests of investors. On April 2005, the State Council issued the "opinion on deepening economic reform in 2005 ", which proposed that "accelerating the joint-stock reform of large state-owned enterprises, support qualified enterprises to gradually achieve the main business of holistic listing", based on the spirit, plans to reduce the number of central SOEs from 155 to 100 until 2010. On October 2005, the State Council approved the Commission’s "opinion on improving the quality of listed companies," the opinion stated:"to support quality enterprises to use the capital market to be stronger, local governments must actively support the quality enterprises to reform and to be a listed company, promote state-owned enterprises to reform, support qualified large enterprises to achieve holistic listing".May in the following year, China Securities Regulatory Commission issued the "IPO and listing management approach ", emphasizing the independence of listed companies, require the Issuer to have a complete business system and direct market-oriented independent management capacity, the integrity of issuer’s asset and independence of staff, financial independence, institutional independence, operational independence. Subsequently, China Securities Regulatory Commission issued the "Administrative Measures for Acquisition of Listed Companies" and management approach for material asset restructuring of listed companies. " All of these, not only provide specific practices for holistic listing for listed companies, but also provide a clear code of conduct and policy basis.Currently, achieving holistic listing through the capital market has become a trend of the times. Therefore, the questions such as what is holistic listing, what are its models, what impact on listed companies by different models of listing become the focuses of the study in this paper.This paper combines the research methods of specification research, case studies, and empirical research, after analyzing the various features of holistic listing model and application, testing the impact on listed companies of holistic listing and the different models of holistic listing, using empirical research, and at last drawing corresponding conclusions. This paper is divided into five parts:The first chapter is an introduction, mainly describes the background, significance, ideas, frameworks, major innovations and shortcomings of this paper. The second chapter is the literature review and the theoretical basis of holistic listing. As a system innovation of capital market, holistic listing has much concern of domestic and foreign researchers. This chapter reviews and evaluates the literature related from the perspective of foreign and domestic. At the same time, holistic listing built on series of economic theories, the most important theoretical basis is efficiency theory, boundary theory and economics of scale and scope, this chapter briefly analysis these theories.The third chapter is to analyze the different modes of holistic listing. Holistic listing is relative to spin-off, it refers to inject all of the assets or all of the operating assets into the listed company to achieve the securitization of all of the asset, and by expanding the boundaries of companies to establish internal capital market. The mode of holistic listing is variety, from the perspective of design; holistic listing in the paper will be divided into listed company as a whole and assets listed as a whole. Among them, listed company as a whole is divided into convertible IPO mode and direct IPO mode; assets listed as a whole is divided into nine basic modes, such as backdoor-listing mode and counter takeover mode (including the takeover mode of its own funds, the takeover mode of buying assets by private placement, the takeover mode of refinancing), convertible group merger mode, convertible merger between listed subsidiaries mode, privatization of public listed subsidiary company mode and integrated mode. This part will describe the concept, scope and typical case of these modes. Through analysis and comparison of multiple modes, then come to the mode of holistic listing suitable for listed company themselves.The fourth chapter is the empirical analysis of the affect on listed companies by different modes of holistic listing. The sample of this section is about the listed companies that have completed holistic listing between January 1,2007 and June 30,2010, excluding the sample of the IPO mode, the back-door listing mode, and the sample data that is not entirely. According to the results of empirical research, we reach the following conclusions:(1) Holistic listing has a very significant impact on the equity structure, financial position, operation results, and stock price of listed company. Overall, holistic listing significantly concentrates the control of listed company, enhances the financial position and operation results of listed company, and promotes the rise of stock price of listed company, and formats a significant wealth effect. (2) In the study of the impacts on the listed company by different holistic listing modes, we find that the impacts are not exactly the same. Particularly in the listed company’s stock price, the stock price movement of convertible IPO mode is significantly stronger than other holistic listing modes. It is this difference exists, making the companies to be listed have the basis for comparison in selecting the mode of holistic listing.The fifth chapter indicates the conclusions and policy recommendations of holistic listing. This chapter briefly summarizes the main conclusions, and then combined with the actual situation of holistic listing, puts forward policy recommendations, which include:have a correct understanding of the effect of holistic listing, concerns with the overall expansion of the market pressure, and improve the information disclosure system of holistic listing, effectively protect the interests of small investors. Finally, this chapter points out the direction for future research.This paper attempts to achieve innovation in the following characteristics: Firstly, this paper sorts out and analyzes the different models of holistic listing. Holistic listing in the paper is divided into nine modes such as, convertible IPO mode, direct IPO mode, backdoor-listing mode, the takeover mode of own funds, the takeover mode of buying assets by private placement, convertible group merger mode, convertible merger between listed subsidiaries mode, privatization of public listed subsidiary company mode and integrated mode, which also provides the reference frame for, follow-up researchers on the study of holistic listing.Secondly, this paper conducts the regression analysis of ownership structure, financial condition, operating results and stock price for different modes of holistic listing, before and after the listing, which shows different modes have different impact on listed companies. For example, the price trend of convertible IPO model is significantly stronger than other modes of holistic listing; it is the existence of such differences making the companies that decide to achieve holistic listing can choose different modes to increase their wealth effect.Thirdly, this paper provides some suggestions on the basis of empirical findings, such as intensifying supervision and management, improving information disclosure and strengthening market regulation in order to response to market expansion pressure, and to protect the interests of small investors.Of course, the transaction of holistic listing is complex, there are many problems need to be studied. Although the concept of holistic listing has been proposed a few years ago, only lack of one hundred companies implement holistic listing.In particular, some holistic listing cases with complex operations and higher demanding are even fewer, such as the cases of convertible IPO mode, refinancing acquisition mode, convertible group merger mode, convertible merger between listed subsidiaries mode are less than 5. At the same time, the level of information disclosure of listed companies varies, resulting in difficulty in obtaining relevant data, which may affect the sample size of this study. Nevertheless, I believe the conclusions of this paper still have strong reliability, this paper’s policy recommendations also has a strong practical value.