A Case Study Based On The Holistic Listing Of China Merchants Shekou Holdings Stock-for-stock Mergers China Merchants Property Development

On December 30th,2015,China Merchants Shekou issued A shares in Shenzhen Stock Exchange in order to absorb and merge all A and B shares of China Merchants Property Development(CMPD).Then China Merchants Shekou(CMSK)completed the holistic listing.Under the background of a new round of state-owned enterprise(SOE)reform,it brought us a new way to solve the problem of B stocks.This paper makes an attempt at making a comprehensive and in-depth analysis of this case and gives the answer of following questions.What are the reasons for the holistic listing of CMSK?What's the innovation of CMSK's holistic listing scheme?What is the impact of CMSK's holistic listing on its resource allocation,corporate governance and financial performance?The following is the research idea of this paper.Firstly,the basic situation is introduced and the contents as well as the specific implementation process of the holistic listing is elaborated.Secondly,this paper dissects the reasons of the holistic listing of CMSK.Thirdly,this paper analyses the holistic listing scheme taking innovation as the breakthrough point and with comparison method focuses on the analysis of the mode of CMPD's A/B shares converted to CMSK's A shares.Then,it is analyzed concretely based on the available data that CMSK's holistic listing impacts its resource allocation,corporate governance and financial performance.Finally,a summary of the above analysis results is made.After research,the following findings are obtained.First,the external reason of CMSK's holistic listing is the development trend of merger and reorganization and differentiation competition in the real estate industry,the deepening of the reform policy of state-owned enterprises and the capital market which are encouraged to be listed as a whole.The internal reason is to optimize the allocation of resources,improve corporate governance,optimize capital structure and solve the problems left over by B shares.Secondly,there were many innovative points in this holistic listing scheme.Thereinto,the model of A/B shares converting to B shares is the most special one,which is replicable and provides new idea for other enterprises to solve the B-share problem.Finally,after the holistic listing,CMSK carries out the operation mode of sustainable development,focuses on the three major business and upgrades,expands the high quality land reserve and promotes the coordinated development of the core business sector by adjusting the strategic positioning,combing the business sector,reproducing the land resources and building the industrial chain of the city operation to help it to optimizing the resource allocation.The holistic listing has also played a positive role in corporate governance.Through the holistic listing,CMSK has introduced strategic investors,rationalized the ownership structure,established a comprehensive and long-term incentive mechanism.Then CMSK is helped to preliminarily realize the diversification of equity,solve the problem of equity structure inversion and optimize the corporate governance mechanism.To some extent,the holistic listing made CMSK achieved the objectives of the reform of the mixed ownership of state-owned enterprises.At the same time,it also has a positive impact on financial performance,and all financial indicators show different degrees of improvement.The innovation of this paper and its application significance lies in the following.This paper makes a comprehensive analysis of this case,starting from the reasons of the CMSK's holistic listing,to the innovation point of the project and the impact of the holistic listing.Through this in-depth analysis,we has confirmed the background and expected goal of its holistic listing,got the advantages and disadvantages of the innovative A and B-share conversion model of A shares with comparison method,and got the positive impact of the holistic listing on the resource allocation,corporate governance and financial performance.This paper provides a reference value for those enterprises in the similar situation by the analysis on its key contents and the comprehensive analysis on its reason and the impact.