Research On The Financial Performance Evaluation Of Hainan Rubber Group's Overseas Acquisition Of R1 International Pte. Ltd

With the development of economic globalization and the deepening of China’s reform and opening up,the government’s support domestic companies to "go global" and to participate in international competition.On the other hand,with the implementation of the "One Belt,One Road" policy,enterprises going abroad are constantly increasing and the pace of "going out" is gradually accelerated.Overseas mergers and acquisitions,as one of the necessary ways for Chinese enterprises to go abroad,are extremely active.Although the number of overseas mergers and acquisitions has declined in the past two years,overseas mergers and acquisitions are still a strategic choice for domestic companies to develop rapidly,to optimize resource allocation,to enter the international market and to improve international competitiveness.As one of my country’s strategic materials,natural rubber is widely used in my country’s defense industry,aerospace.As the largest natural rubber consumer in China,the domestic natural rubber industry has been sluggish due to the continued decline in global natural rubber prices.Overseas mergers and acquisitions is a necessary way to solve the current small,scattered and weak natural rubber industry in China.Therefore,how to help my country’s natural rubber industry enterprises to successfully implement mergers and acquisitions in the international market and improve their financial performance after mergers and acquisitions has become a key issue.Hainan Rubber,as my country’s largest leading enterprise in the production of natural rubber industry,has a leading advantage in China,but lacks international influence.The financial performance of its merger and acquisition of the world’s largest natural rubber trader,R1 international Pte.Ltd,is worthy of further study.On the basis of researching and sorting out relevant merger and acquisition theories,this paper firstly analyzes the merger decision and merger process of Hainan Rubber’s merger with R1 international Pte.Ltd,and then analyzes the reasons for merger and acquisition.Secondly,in terms of short-term financial performance,this paper adopts the event study method and uses the capital asset pricing model to analyze the two-stage CAR(cumulative abnormal return).Then,in terms of the long-term financial performance of Hainan Rubber’s acquisition of R1 international Pte,this paper uses AHP(Analytic Hierarchy Process)and FCE(Fuzzy Comprehensive Evaluation)method to evaluate the two-stage performance.From the four dimensions of profitability,asset quality,debt risk,and business growth,this paper selects 14 financial indicators that can reflect the characteristics of the natural rubber industry and M&A events to build a long-term financial performance evaluation system.The research conclusions are as follows: Firstly,the short-term financial performance of the two stages has been good,and there is a cumulative abnormal rate of return during the time window,which has a positive impact on Hainan Rubber’s stock price.Secondly,the long-term financial performance of the two stages of the merger and acquisition is not satisfactory.In the first stage,the post-merger score has a significant downward trend,and the score in the second stage is stable at a low value.Finally,through the merger case,this paper puts forward corresponding countermeasures and suggestions from the aspects of merger target and merger timing,and provides reference for overseas mergers and acquisitions of natural rubber industry enterprises in my country.