Case Research On Reverse Merger Of S.F. Express

In recent years,China has entered the era of Internet information,and e-commerce has developed rapidly.The express industry has been catering to this development opportunity,and its scale has exploded largely.However,the slowdown of economic speed and the intensification of competition in the industry have led to the decline of profit in the express industry,so the development of enterprises in the industry has entered a bottleneck period.In order to break through the difficulties and continue to develop at a high speed,the express delivery industry needs to improve its core competitiveness,and it needs to take advantage of capital forces to seize development opportunities.And special authorization in our country makes low efficiency,long time,high cost through the method of IPO.In contrast,choosing the method of the reverse merger to access to capital markets is more conveniently and directly.So in 2016,the enterprises of express industry chose the method of reverse merger continuously.S.F Express taking the leading position in the express industry in China,with its integrated management,high efficient and high quality service in the domestic express market,is occupying the high-end market of domestic express industry by means of absolute advantage.However,due to the development characteristics of heavy assets under the direct mode,the cost is far higher than that of the franchisee enterprises represented by ShenTong Express,YuanTong Express,ZhongTong Express and YunDa Express.In recent years,to grab market share,the enterprises listed have improved service quality.Meanwhile,the rise of E-commerce logistics and strong brand express company’s competition in the international market,makes itself facing severe challenges both in the domestic and international market.In order to maintain its own development advantages and obtain the support of capital,SF Express,which is known as "leading enterprise",chose to access the market by reverse merger.Based on the background,the author analyze the successful case of S.F Express.Firstly,the context introduces the background and financial situation of the buyer and the seller,and an overview of the transaction,including description of the transaction process and the choice of the transaction mode.Secondly,analyze the motivation of the reverse merger that both sides carry out.Thirdly,evaluate the performance after the ending of the case.The performance analysis is from two angles.From the perspective of short-term performance analysis,the author selected the day that the reverse merger plan announced and the day the plan authorized by China Securities Regulatory Commission as the event date.Through the event approach,the paper evaluates the market reaction of the reverse merger.The research shows that in the event selecting the plan announced day as the event date,reverse merger case of the S.F Express has positive market reaction.But in the event that choosing the day the plan was authorized by China Securities Regulatory Commission,due to the overreaction of market in the last event and other factors,the degree market reaction is small.From the perspective of long-term performance analysis,we use principal component analysis to reduce the dimension of selected variables and get the most explanatory factors,and evaluate the long-term performance of S.F Express based on the final score change trend.The final score change trend shows that the impact of the case of reverse merger on S.F Express performance is positive.Finally,we summarize the whole case,and illustrate the enlightenment for the problems in the process of reverse merger,providing reference for the other enterprises.