On The Motivation And Economic Consequences Of Colour Life Spin-off Listing

With the rapid development of our country's economy,enterprises have more and more ways of financing.In the past,many companies tended to choose the way of merger and acquisition to expand their scale or diversify their business.However,there are also many drawbacks.Merger and acquisition may make the organization of enterprises more complex and difficult to manage.To some extent,it will hinder the development of enterprises.As one of the important pillars to promote China's economic development,many enterprises have adopted the strategy of splitting up their property companies and listing them in order to promote the diversification of parent and subsidiary companies.As a capital-intensive real estate industry,large-scale expansion or strategic transformation requires a lot of capital investment.Stable cash flow is very important for the survival and healthy development of real estate enterprises.However,with the opening of domestic capital market to the restriction of equity financing in the real estate industry,the trend of using direct financing to replace high-cost borrowing funds is becoming more and more obvious.Under various policies,with the continuous improvement of the capital market environment,the split listing has brought good economic benefits to enterprises,and has gradually been accepted by more and more enterprises.Under the current trend,the advantages of split listing have gradually emerged.Spin-off listing is a new means of capital operation,which has important value and significance for enterprises and capital market.Based on information asymmetry theory,financing theory and management incentive theory,enterprises often choose to split listing.Spin-off listing usually affects the operation status and corporate value of parent and subsidiary companies,and can bring good economic consequences to enterprises.There are many levels of economic consequences.Combined with the relevant research on the spin-off listing,we can find that the economic consequences of the spin-off listing are mainly manifested in three aspects: first,the spin-off listing can affect the resource allocation of enterprises;on the one hand,the spin-off listing can promote the broadening of financing channels of subsidiaries and improve financing capacity;on the other hand,spin-off listing can also affect the financing capacity of subsidiaries.Promoting the core strategy and specialized operation of parent and subsidiary companies and improving the management efficiency of subsidiary companies;Secondly,spin-off listing can affect the corporate governance,subsidiary companies can also use the information disclosure requirements of capital market to transmit good information to the market,and promote the convergence of managers and enterprises' interests by equity incentive policies;Finally,spin-off listing can affect the company's value and split up.After the market,enterprises can rationally optimize the allocation of resources,strengthen corporate governance,improve business performance,thus affecting the value of the company.In 2014,the Fantasia split off the Colour Life of its property company and listed it in Hong Kong,becoming the first case of real estate enterprise splitting property company listed in Hong Kong.This paper chooses the case of splitting lottery life into stock market in pattern year to discuss.By studying the motivation of splitting Colour Life into stock market and the economic consequences of splitting into stock market,it can provide some reference for other enterprises in real estate industry to splitting into stock market.This paper mainly uses case study method and literature research method to analyze and discuss the case of Colour Life.Firstly,it introduces the related theory of the spin-off listing.Secondly,it studies the motivation and path of choosing spin-off listing based on the current situation of capital market and property service enterprises.Then,it deeply discusses the impact of the Spin-off listing on Colour Life from three perspectives: resource allocation,corporate governance and corporate value.At the end of the article,this paper summarizes the relevant experience of the split lottery life listing in pattern year,and puts forward some suggestions on some problems that still exist after the split lottery life listing.