The Study On The Value Creation Of Domestic Spin-off Listing

As China’s economy moves towards high-quality development,the negative synergistic effect brought by expansion diversification becomes more and more intense.Shrinking capital operation has triggered a new round of hot discussion in the capital market.Diversified layout Listed enterprises can effectively alleviate the diversified development dilemma of jumbled business and deviation from the main business by separating high-quality businesses business to seek optimal allocation of resources and improve the overall profitability of the group.In 2000,China officially ushered in the first case of spin-off and listing in the strict sense named Tongrentang Technology,due to the lack of development of the domestic capital market,the long-term vacancy of relevant policies and the strict regulatory attitude,most of the Chinese listed enterprises favored to chose Chinese Hong Kong or overseas to spin off subsidiaries,and the domestic spin-off and listing has not been able to make a breakthrough for a long time.Since then,the long hard exploration of equity carve-outs begins for China’s listing enterprises.Due to the imperfect capital market,long-term vacancy of related policy,and harsh regulation and supervision,the domestic spin-off and listing generally developed slowly.As of the implement of official policies listed in 2019,the domestic spin-off and listing channels have been officially allowed,which conforms to the wave of shrinking capital restructuring of diversified enterprises returning to focus on the main business and reshape corporate strategy.As a test field of China’s capital market system innovation,the Sci-Tech Innovation Board took the lead in becoming the first board for spin-off and listing enterprises in China.In July 2019,Endovascular Med Tech became the first domestic spin-off listing company in China,which has certain reference value for the subsequent theoretical research and practical guidance of domestic spin-off listing in China.In this paper,Endovascular Med Tech,is targeted as study object for the earliest domestic spin-off case in China.This paper concentrates on the company value creation of spin-off and listing.First of all,on the basis of sorting out the background of domestic split listing,current relative policies and regulations,combining with the motivations and specific scheme design of spin-off,the complete process of spin-off and listing is systematically introduced and analyzed.Then,researched in accordance with the logical level,this paper analyzes the value creation methods of the company’s equity divestiture from the perspectives of financing impact,corporate governance impact and operating impact,and at the same time,using the short-term market reaction and Black-Scholes option pricing model figures out if the enterprise value has been significantly improved after the parent subsidiary’s spin off.It’s concluded that through the spin-off,the subsidiaries have realized the increasingly excellent impacts at aspect of financing capability and market value,corporate governance and asset operation ability,main business profitability and brand value.Finally,the research conclusions are drawn that the spin-off and listing improves the company value,mainly through the role of financing activities to enhance research and development ability,the role of corporate governance activities to improve the level of management,and the role of operation activities to strengthen the main business profitability and the market dominance.The author reviews and organizes the full paper,and comes up with several suggestions provided for the companies that have the demand of spin-off and listing,so as to offer some references for improving the efficient integration and operation of multi-level capital market in china.Compared with previous studies,the innovation of this paper firstly is that the case study itself is typical.Through the comprehensive analysis of the scheme design and the process of the first domestic spin-off listing,the substantive conditions of China’s domestic spin-off listing are deeply explored.Secondly,the research content is comprehensive.This paper systematically analyzes the history and current situation of spin-off listing in China,which enriches the macro-background foundation and makes case analysis more logical.Thirdly,the research perspective is unique.Before most scholars at home and abroad gave priority to the motivation and economic consequences of split listing,ignoring the detailed analysis of the value creation approach.This paper comprehensively explores the ways to value creation by split listing,and evaluate the value creation from multiple perspectives,including the financial data,market effect and option model.Based on this,the research of this paper enriches the research on value creation of spin-off listing,and provides practical experience for spin-off listing enterprises to achieve value creation.