Research On The Financial Performance Of Tongrentang's Spin-off And Listing

For a long time,the demand of diversified group’s spin off listing has been increasing,but the motivation of corporate spin off listing and the impact of spin off listing on corporate financial performance need further study.The pharmaceutical industry has always been the top priority of national development,and 2020 is also the final year of the 13 th five year plan.The proportion of enterprises in the Chinese medicine industry in the spin off listed enterprises is also relatively large.As the leader of the Chinese medicine industry,Tongrentang Group has the experience of two spin off listings,and the interval between the two events is relatively long,and there is basically no interactive impact,which is of great significance to its research Meaning:first,it is conducive to Tongrentang’s continued spin off and improvement of its financial situation;second,it can provide reference for the spin off and listing of TCM enterprises in the same industry;finally,it can provide decision-making basis for other stakeholders to invest.Therefore,the following two research purposes are established: on the one hand,objectively and effectively evaluate the financial performance of Tongrentang before and after the two spin offs;on the other hand,summarize the experience of Tongrentang spin offs to provide reference for other enterprises.Taking Beijing Tongrentang Group Co.,Ltd.as an example,this paper analyzes the motivation of the two divestitures of Beijing Tongrentang,studies the short-term financial performance of the divestitures by using the event study method,fits out the coefficient of the estimated period by using the linear regression equation of one variable,calculates the expected return rate of individual shares by substituting,and obtains the excess return in the window period of the divestitures by subtracting the actual return rate of individual shares in the window period Finally,the cumulative excess return is calculated.At the same time,Entropy Weight Grey Relation TOPSIS method is used to study the long-term financial performance after the split.From the traditional five aspects of debt repayment,profitability,development,operating capacity and asset structure,19 core indicators are selected.The weight of each indicator is calculated by entropy weight method,and the grey relation coefficient is calculated.Finally,the close degree with the optimal scheme is synthesized to judge the long-term financialperformance.This paper summarizes the reasons for the poor performance of Beijing Tongrentang after the spin off and puts forward corresponding countermeasures and suggestions.The results are as follows: the first time Tongrentang was split up,the short-term financial performance is good but the long-term performance improvement effect is not obvious;the second time,Tongrentang Guoyao’s short-term financial performance is poor,the market has early response,and the long-term financial performance has not been effectively improved.For Tongrentang,it puts forward the suggestions to improve its performance level from the aspects of improving the supervision of the quality of subsidiaries,management incentives after the spin off,responding to national policies,developing network sales platforms,developing new products and new businesses;for the suggestion of the spin off of the same industry,it mainly puts forward that enterprises should make their own strategies based on the correct spin off motivation and selecting appropriate businesses for the spin off Spin off plan.