Research On Value Creation Effect And Realization Path Of Spin Off Listing

Spin off listing is an emerging asset restructuring method that can not only share high-quality resources of listed companies with investors,but also promote high-quality development of the capital market.Since the 1980 s,with the continuous emergence of negative synergies brought about by mergers and acquisitions,many European and American countries have successively launched a wave of spin off listings and have become mature in application.However,due to the lack of a sound institutional system for spin off listing in the Chinese capital market,and the China Securities Regulatory Commission’s clear expression of "discouraging" and "strict and cautious" attitude to the market at the fourth and sixth insurance agent training sessions in 2010,most Chinese companies choose to spin off their subsidiaries for overseas listing,which also limits the capital operation of high-quality Chinese companies.However,the successive introduction of policies such as the "Measures for Continuous Supervision of Listed Companies on the Science and Technology Innovation Board(Trial)" and the "Several Provisions on Pilot Domestic Listing of Subsidiaries under the Spin off of Listed Companies" in 2019 have provided new financing channels and competitive advantages for Chinese listed enterprises,making spin off listing gradually a trend in the capital market.Therefore,this article combines the latest capital market environment and selects a unique research perspective.Based on management incentive theory,information asymmetry theory,financing prioritization theory,and internal capital market theory,using case analysis method,the first successful listed enterprise in Fujian Province,namely Xiamen Tungsten Corporation’s split of XTC New Energy Materials,is selected as the research object.Guided by the two core research questions of "Has the spin off listing created value for the enterprise?" and "What are the value realization paths of spin off listing.Firstly,this article comprehensively evaluates the value creation effect of spin off listings from the perspectives of the stock market and corporate finance,using indicators such as cumulative excess return,Tobin Q,and P/E ratio,combined with the application of ROE six factor decomposition method and EVA five factor decomposition method;Secondly,based on the results of factor decomposition,the main paths of value creation are revealed sequentially from the governance level,operational level,and financial level;Finally,this study found that:(1)The main motivation for a spin off listing is to obtain a valuation premium,optimize financing channels,and achieve specialized operations.(2)The value creation effect of the split listing is relatively significant,with an increase in the cumulative excess average return rate in the stock market,and good performance in Tobin Q value and P/E ratio;From a financial perspective,both ROE and EVA have achieved significant growth.(3)The realization path of value creation includes: firstly,at the governance level,by introducing strategic investors,optimizing shareholder base,and effectively reducing agency costs and improving agency efficiency through equity incentives;Secondly,at the operational level,achieve rapid growth in revenue scale,reduce sales costs,improve turnover efficiency,and stabilize research and development investment and results;Thirdly,at the financial level,by expanding financing channels,capital structure optimization has been achieved,capital costs have been reduced,and debt risks have been effectively alleviated;In addition,this article suggests that companies planning to spin off and go public should carefully select high-quality internal assets for spin off based on their own needs,and advocates that regulatory authorities should increase their review efforts,pay attention to market concerns,further improve the laws and regulations of spin off,and ensure the orderly operation of the capital market.Through the study of this article,it is theoretically beneficial to further enrich the theory of value creation,asset restructuring,and corporate financing and fundraising;In practice,it is beneficial to provide experiential value for enterprises planning to go public through spin off,optimize the value creation effect generated by spin off,and also provide reference for regulatory authorities to revise and improve the relevant system of spin off listing.