Study On The Performance Of Holistic Listed Chinese Group Company

In china, holistic listing was appeared in the capital market as an important financialinnovation to solve the spin off listing problems. In2003, TCL Group merger byabsorption TCL communication is the first of Group holistic listing in China. To2014January, there have94companies completed the holistic listing in China. The holisticlisting has not only brought the promotion of enterprise value of the listing corporation,but also has a positive impact on China’s capital market. This is because holistic listingcan reduce the affiliated transaction of the listed company, eliminate and avoid theexisting or potential horizontal competitions, improve the corporate governance and isconducive to the protection of the interests of small shareholders. In the holistic listingprocess, injection of high-quality assets of the group company improve the scale and thecompetitiveness of listing Corporation and is conducive to business bigger and stronger.With the further development and perfection of the Chinese capital market，Groupholistic listing will be more and more in the future. In the past, many financial scholarshave conducted research on the performance of holistic listing, with case analysis andempirical test. But the case study gathered in the state-owned enterprises, the empiricaltest for pattern classification based on the path listed. This paper makes comparativeanalysis on the overall market performance on the pattern classification based on theperspective of thoroughness, and analyses and explores deeply the private enterpriseMIDEA Group absorb and merger MIDEA appliance’s mode and performance, which ishoped to contribute to the holistic listing of research and performance.In this paper, it analyses the relationship between holistic listing and its performanceand the relationship between holistic listing patterns and its performance from the twoaspects of empirical analysis and case study on the foundation of the definition ofholistic listing, model and performance, and based on financial basic principle. On thepart of empirical analysis, this paper selects82companies completed holistic listingbetween2003and2014as sample; use the method of event study to measure the marketperformance, and studied on the statistics and comparison of holistic listingperformance and merger mode and non-merger mode’s performance. On the case study,this paper selects MIDEA Group which completed holistic listing in2013as arepresentative. Based on interpretation of the absorption of the merger plan, the modeand the process, we use the event study method and factor analysis method to analyze the market performance and financial performance and give a qualitative analysis forthe influence mechanism of the performance of the holistic listing.Through the empirical analysis, we find: One is the holistic listing’s market reactionis positive, the performance is good, and it created wealth for shareholders. The reasonmay be investors are aware of the holistic listing will bring to the enterprise valuepromotion in either business level or management level. Two is the merger mode’smarket reaction is more positive than non-merger mode. This is because the absorptionmerger holistic listing mode is more thoroughly, can more significantly reduce relatedparty transactions. And it is more advantageous to protect the interests of investors, so itcan be easily approved by the market. Through case study, we know: First, holisticlisting’s CAR is38.33%, BHAR on one year and one point five years is107.20%and129.84%, it not only give an opportunity to short exchanges, but also greatly enhancethe company’s stock investment value, and the market performance is very good. Theconclusion is consistent with the empirical analysis. Secondly, holistic listing alsoimproves the financial performance on a certain extent. Consider the industry factor,MIDEA Group’s financial performance only improves27.32%, relatively speaking, theincrease is not large. Thirdly, MIDEA Group holistic listing has been able to achievegood performance is because it improves the overall competitiveness of enterprises, getgood synergistic effect, reduce the associated transactions, improve corporategovernance, and optimize equity incentive. Accordingly, it is worth mentioning thatMIDEA Group holistic listing break system obstacle that non-listed company cannotabsorb the merger of listing Corporation, which provides a new holistic listing pattern,which has reference significance for the companies which characteristic “a large groupof small companies”, the parent company assets are good and are unwilling to largelyadjust organizational structure.