Research On Financial Performance Evaluation Of MicroPort Spin Off

In recent years,influenced by the policy,China’s medical device industry is developing rapidly,the competition among domestic medical device companies is fierce.Mico Port is a medical device company,which has received policy dividends on one hand and is under competitive pressure on the other hand.Therefore,minimally invasive medicine is in urgent need of a new development path.At the same time,the spin-off IPO,which has emerged in China in recent years,is an effective means of corporate transformation,so in 2019 Micro Port underwent its first spin-off IPO.Under the fierce competition in the medical device industry,it is particularly important to study whether a spin-off can bring about an improvement in corporate financial performance.Takes the Micro Port spin-off event as the research object,compares and outlines the theoretical basis and the current status of research,evaluates the financial performance in the long and short term.The short-term financial performance study uses the event study method,with the cumulative excess return CAR as the measure.The results show that the cumulative excess return rate increases after the spin-off and the short-term financial performance of the company is improved.The long-term financial performance study is based on the financial indicator method and economic value added method.Using the financial indicator method to analyze the solvency,operating capacity,profitability,and development capacity of the enterprise,and using the economic value added method,EVA is used as the evaluation and analysis index,which can include the cost of capital and capital structure into the evaluation scope,while combining the industry average value and the comparison with the enterprises in the same industry to exclude the influence of macro environment,to comprehensively and scientifically analyze Micro Port’s long-term financial performance.The results show that Spinoff IPOs have little positive impact on long-term financial performance,Micro Port’s long-term financial performance is poor after the spin-off.The study found the following problems in Micro Port’s business process: low inventory turnover,inefficient utilization of assets,high percentage of revenue from overseas business,high overhead and R&D expenses and administrative expenses,and high percentage of equity capital.Based on the problems,the following recommendations were made: strengthen inventory management level to reduce inventory backlog;improve asset utilization efficiency;increase domestic market share and reduce the impact of foreign market fluctuations;reasonably control costs and expenses to improve profits;optimize capital structure and improve capital utilization.And the following insights are provided for listed companies that are willing to spin off: select suitable subsidiaries for spin-off,use the funds raised from the spin-off wisely,and focus on improving long-term financial performance after the spin-off.