Study On The Motivation And Economic Effect Of The Asset Stripping Of Shunxin Agriculture

In recent years,after a period of diversification and expansion boom,divestitures of listed companies have become increasingly active.More and more companies intend to reduce the scope of their business operations through asset divestiture,return to their superior businesses and improve their corporate performance.Most the companies in China are implementing diversified procedures with unrelated core competencies.According to the idea of nucleation to the theory of optimal resource allocation,divesting unrelated businesses can effectively optimize the industrial structure of enterprises,achieve optimal allocation of corporate resources and guarantee the subsequent development of enterprises.At the same time,asset divestiture can also bring direct capital inflow to the enterprise,alleviate the enterprise’s debt pressure in the short term and enhance the enterprise’s performance in the capital market.This paper selects the ongoing divestiture events of Shunxin Agriculture from 2014 to2017 as the research object to study the economic effects of divestiture.First,the research results of domestic and foreign scholars are summarized and combined with the relevant theoretical bases of asset divestiture: the theory of nucleation,the theory of optimal resource allocation,the theory of information transmission,and the theory of synergistic effect to obtain specific research ideas and methods.Secondly,we analyze the background,process,and motivation for asset divestiture of Shunxin Agriculture from the case the divestiture of Shunxin Agriculture.The overly diversified industrial structure of Shunxin Agriculture makes non-core assets squeeze the capacity and resource input of the central business,restricting the development of its main core business and dragging down the overall development of the enterprise.A continuous asset divestment was implemented in2014 to improve corporate performance.To verify whether the series of divestiture events of Shunxin Agriculture can effectively improve the corporate performance and benefit the subsequent development of the enterprise.Finally,the event study method is used to analyze the market performance of divestitures of Shunxin Agriculture,and the mutation level method combined with the entropy method is used to analyze the long-term performance of divestitures.The results show that the market performance of divestitures of Shunxin Agriculture has been improved to a certain extent and the long-term performance is also better.Asset management capability and profitability are improved;accordingly,short-term solvency performance is good,and long-term solvency slightly improves with insignificant effect.The main business is more clearly defined,and the long-term performance development is also more optimistic.By analyzing the impact of the economic impact produced by asset divestment on Shunxin Agriculture,inspiration was obtained: enterprises should accurately grasp the timing and take the initiative to implement asset divestment;concentrate their capabilities and resources on their primary business and improve their core competitiveness.