Research On Behavior Strategy And Consequences Of "Spin Off Listing" Behavior Of Chinese Listed Companies

On December 13,2019,China Securities Regulatory Commission(hereinafter referred to as CSRC)officially promulgated Several Provisions on the Pilot Listing of Listed Companies to Spin-off Subsidiaries in China(hereinafter referred to as "Several Provisions"),which shall come into force as of the date of promulgation.It indicates that"spin-off listing" integrated into the domestic capital market in a comprehensive and orderly way in the regulatory level has taken a key step.On the basis of previous regulations,the Regulations set out seven conditions for all companies to be listed on a spin-off."Spin-off subsidiaries listed in the domestic market" is a rarely successful spin-off path,now the new rules open the policy path,become rules to follow,there are laws to follow,the threshold of spin-off is lowered,spin-off boom is also expected.It is in this upsurge that people should think more about the impact of spin-off subsidiaries listed in China on the parent and subsidiary companies.How to implement the spin-off strategy to achieve good results?Firstly,this paper summarizes the relevant research results of domestic and foreign scholars and the theoretical concepts related to spin-off listing through literature review.On the basis of analyzing the evolution and development status of domestic spin-off and listing policies,we choose SHWGQ Spin-off and Shine-link Stock for domestic listing as a case study.What is the impact of the spin-off listing in China on SHWGQ and Shine-link?And it is subdivided into three specific issues:the motivation of domestic spin-off listing;Choice of spin-off listing strategy and economic consequences of spin-off listing.The case study of this paper analyzes the spin-off behavior of SHWGQ from the perspective of the background,motivation,implementation process,implementation strategy analysis and economic consequences.Through the case study,we find that:(1)the spin-off strategy of SHWGQ and Shine-link Co.,Ltd.belongs to the cross-industry mixed spin-off of shareholding type;(2)The main reasons for SHWGQ’s spin-off and listing in China are:financing demand,maximization of enterprise value and implementation of development strategy;(3)The domestic spin-off and listing has created positive market value and enterprise value for the parent and subsidiary company.The spin-off can satisfy the financing needs of the parent company,help the parent company to implement the core strategy,and help the subsidiary to further play its development potential and realize the business expansion strategy of the subsidiary.(4)The right split strategy is conducive to the common development of the parent-subsidiary company.Not all spin-off listing behavior can get long-term positive economic benefits,spin-off strategy selection is very important.This paper draws the following research implications:(1)Taking appropriate strategy is the guarantee of successful spin-off listing,and avoid blind spin-off by all means.On the one hand,the parent company should carefully consider the necessity and feasibility of spin-off.On the other hand,the subsidiary also needs to make judgment and strategic planning for the brand new internal and external environment.(2)Spin-off listing shall be clear about the subject of the proposed spin-off and the route of capital operation.In the early stage of preparation,the parent company should clarify the business and asset scope of the subject to be split,comprehensively consider the business situation of the subsidiary,and plan the subsequent capital operation route.High quality assets should be selected as the subject of the proposed split;(3)Spin-off listing requires effective control of the listing process.Including the "enterprise" and "people" two aspects of control.The parent company shall make a systematic investigation and planning for the independent operation of the assets to be divested,and pay attention to the compliance of the process.In terms of human control,it is necessary to do a good job in the communication and reform of managemen t personnel,and all stakeholders are under control.The needs of all parties should be comprehensively considered and communication plans should be developed to efficiently solve the problems and ensure the orderly progress of the spin-off process.(4)Domestic spin-off and listing provides new ideas for the reform of state-owned enterprises.