Study On The Performance Of Asset Restructuring Of Loss-listing Companies

With the improving and optimization of listing Corporation delisting mechanism in China stock market, there will be more troubled listing Corporations, because they can not meet the listing qualification standards and are forced to leave the termination of listing and the stock market. Therefore, the primary task of China’s loss-listing Corporation is profitable and retains the listed qualifications; in addition, some powerful companies will take action, be listed as soon as possible. At this time, as the company gradually realized the importance of the reorganization of assets, compared with the market qualification standards, asset restructuring actions showed great advantages, such as, rapidly improve the company carrying asset quality, beautify the financial condition and so on. Therefore, many loss-listing Corporations see the reorganization of assets as a preferred solution. In this scheme, some companies which delisting for even as long as five years, has obtained the market opportunities. From this we know, many loss-listing Corporations have taken the asset reorganization as their "life-saving straw". Reorganization of assets in securities market seems to be the last eternal theme, as an important means of listing Corporation of resource allocation, asset reorganization is not only to improve the management of listing Corporation, and to adjust the industrial structure, improve the company’s main business ability, therefore, in recent years, the reorganization of assets subjects to many loss-listing Corporations’favor.However, we have to ask, if loss-listing Corporation’s asset reorganization really improves the performance of the company; if it is, is there anything we need to perfect? If necessary, how to improve? To answer these questions, we must study the Chinese loss-listing Corporations’asset restructuring performance. This paper selects the loss-listing Corporations in the Shanghai and Shenzhen stock market which took a major reorganization of assets in2010as a research sample, extracts some financial indexes of the sample firms before and after the reorganization of assets during6years(Two years before recombination, the recombination year and three years after that,2008-2013), and sets up the evaluation index system of loss-listing corporations’performance of asset reorganization,then constructs the samples’ comprehensive score model by using the principal component analysis method, after that, we can study the overall performance according to the loss-listing corporations’ omprehensive score of asset restructuring, in order to reveal the financial effect of loss-listing corporations’ asset reorganization on their profitability, operating capacity, solvency and development ability,etc. and, this paper makes a further study about different kinds of assets reorganization. Finally, guides the restructuring behavior according to the basic theory, and puts forward advice and suggestions about how to standardize the assets restructuring.From the methods used in this research, this paper firstly uses normative analysis and empirical analysis methods, and then uses dynamic analysis and static analysis. The study found, recombinant behavior’s effect is different in each year, and also, different restructuring ways can lead to performance differences. Specifically, some asset restructuring behavior of our loss-listing Corporation, for the reorganization of the short term, the financial situation has improved significantly, whether the overall size of the loss-listing Corporation, or corporate debt paying ability, operating ability, profitability and other aspects are better, the profitability’s improving is more prominent, the companies’net profit growth is rapid, the Corporation hope that through the company asset reorganization, they can improve the company’s profitability or the plight of sustained losses. However, unfortunately, the effect of assets reorganization has not been continued. While some companies pay attention to the overall integration, asset structure and the optimal allocation of resources, this can improve the long-term sustainability of the performance of the company, but it takes several years before the show of the reorganization’s effect. Therefore, in general, loss companies’reorganization performance has a long-term contribution. The third year’s performance was significantly higher than that of the two years before, in the restructuring year and the next year, the restructured company’s performance did not improve, even has a kind of larger landslide phenomenon. There is a certain lag of assets recombination.At the same time, the study found, different forms of asset restructuring will have different influence on the financial performance of the loss companies. Among them, in the long run, the replacement of assets has the best performance of reorganization, it can bring more in-depth reform and improvement, the company’s asset quality improved, the industrial structure had adjustment, and the level of management improved. Compared with single asset restructuring, nixed restructuring behavior has more increase in the breadth and depth, which makes the resulting performance is relatively good, but, mixed reorganization does not like the replacement of assets, which can significantly improve the comprehensive competitiveness of loss-listing Corporation. Restructuring of assets transfer and sold, can put profits into the financial statement quickly, but it has a drawback, it is the lack of continuity, it can almost make no improvement of the loss-listing Corporation’s governance and industrial structure, on the contrary, some loss-listing Corporation can even retain the listed qualifications at the expense of the sale of business assets. Debt restructuring is similar, not related to the company’s main business and core competitiveness improvement, debt must be paid within a specified time after the reorganization year, therefore, debt restructuring also has poor sustainability. To sum up, in the long run, the replacement of assets has the best performance of recombination, whereas the other three forms of asset restructuring, although more convenient, also can beautify the financial statements in the short term, but generally speaking, have poor sustainability.