Shenyin Wanguo's Performance Research On Hongyuan Securities

Since 1980 s,the world's five major wave of mergers and acquisitions have been set off in major developed countries.Most of the famous foreign companies such as Coca Cola,Microsoft and GE have developed through M&A.With the continuous development of China's capital market,successful cases of M&A are increasing.M&A can not only enhance the strength of companies,but also play a key role in improving the company's market share.As a result of the financial crisis in 2008,a series of negative effects have been brought about.In recent years,the enterprises in our country generally face dilemma such as low capital turnover rate,weak competitiveness of their products in the international market and the low innovation ability of enterprises.Under such circumstances,M&A has become an important way for enterprises to get out of their predicament.As the world economy is in a state of rapid development,the position of financial markets in the entire market is also rapidly rising.As an important branch of the financial industry,the healthy and rapid development of the securities industry is crucial to the development of the national economy.Over the past period,major securities companies are eager to upgrade their own capabilities in order to cope with rapid changes and competition in the securities industry in China.They strive to be able to stand undefeated situation among securities companies.At present,there are often many large securities firms in order to expand their capital base and business scope.They typically enhance their capabilities by acquiring smaller securities firms.It is not difficult to find that large securities companies who pursuing rapid development will regard M&A as an important strategic decision to achieve expansion and development in the coming period.This paper analyzes the typical case of merger between Shenyin Wanguo and Hongyuan Securities,and introduces the concepts,types and basic theories of M&A.The paper uses event research method,and factor analysis method to analyze the performance of M&A,and improves the current literature's excessive attention to financial indicators while ignoring the non-financial indicators.The paper introduces a balanced scorecard perspective and links it with the synergies generated by M&A.It establishes a comprehensive evaluation index system from the four dimensions of finance,customers,internal processes,learning and growth,and analyzes M&A performance.As a result,the stock price rose sharply after the merger between Shenyin Wanguo and Hongyuan Securities,and investors' expectation for the M&A behavior was high.The M&A activity generates excess return rate,which brings wealth effect to shareholders.Through factor analysis,it establishes a comprehensive evaluation index system covering solvency,profitability,growth capacity and shareholder wealth.It revealed that after the merger of the two companies,the overall score of Shenwan Hongyuan has increased significantly,indicating that the M&A has effectively improved the company's financial status and market competitiveness;According to the four-dimension comprehensive index system evaluation,except for the weakening of human capital indicators in learning and growth,other indicators perform better.Mergers and acquisitions achieved corresponding financial synergies,management synergies,operating synergies and intangible assets synergies.Overall,the case of Shenyin Wanguo's acquisition of Hongyuan Securities was successful.It optimized the company's financial situation,improved the company's capital size,operational capacity,profitability and growth ability;reduced the management fee rate and improved Management efficiency;complementary business advantages and customer resource sharing,enhanced overall strength and market share.At the end of the paper,according to the conclusions of the merger of Shenyin Wanguo and Hongyuan Securities,the relevant recommendations of the future securities industry on M&A activities are put forward.These recommendations provide a reference for securities companies when planning M&A transactions.