Case Study On The Spin-off Listing Of CSPC

Entering the 21 st century,China’s economy is developing continuously,the domestic capital market is becoming more and more prosperous,and the number and scale of listed companies are growing rapidly.During this period,M&A and diversified investment strategies were adopted by many companies to expand their own scale.Although the above strategies are conducive to the rapid growth of enterprises and the development of new markets,as the scale grows to a certain extent,these listed companies also face problems such as reduced management efficiency,dispersed business resources and poor information transmission.In response to the above problems,some listed companies adjusted their strategies and began to choose the operation mode of split listing in order to concentrate business resources and broaden financing channels.As a contractive strategy,spin off listing is widely used in the West,but it started late in China.The split listing of listed companies in China has mainly gone through three stages: in the first stage,a small number of domestic enterprises split their subsidiaries to be listed overseas,starting with Tongrentang Chinese Medicine’s split listing of Tong Ren Tang Technologies Co.Ltd.in Hong Kong in2000;In the second stage,with the change of policies,the channel for domestic enterprises to split subsidiaries and list in Hong Kong shares was officially opened.At the later stage of this stage,some mainland listed enterprises in Hong Kong began to split their subsidiaries and return to the A-share market,but the domestic companies were still strictly supervised in the domestic split listing;The third stage is marked by the official issuance by the CSRC in 2019 of Several Provisions on the Pilot Domestic Listing of Subsidiaries of the Spin off of Listed Companies,which marks the basic lifting of the restrictions on the operation of the spin off of domestic companies.Domestic research on spin off listing is still in its infancy,and there are fewer relevant cases compared with foreign countries.At present,most successful cases of spin off listing are concentrated in real estate related industries(property sector)and the pharmaceutical industry.Based on the above situation,this paper takes the listing of Xinnuowei,a spin off subsidiary of CSPC,one of the leading enterprises in the pharmaceutical industry,as a case study.Using the method of case study,this paper analyzes the reasons,paths and results of CSPC’s spin off listing.First of all,it theoretically expounds the relevant concepts of spin off listing,including the definition,type,mode,path,motivation and performance evaluation of spin off listing;Secondly,this paper introduces the industry background,the basic situation of the parent subsidiary company and the process of the split of the case;Finally,this paper analyzes and studies the motivation and impact of CSPC’s spin off listing,and then summarizes the research conclusions of this paper according to the analysis results,and puts forward suggestions to other enterprises trying to spin off listing.After the above research,this paper draws the following conclusions: First,CSPC has improved the enterprise value through the spin off and listing operation;Second,CSPC’s entry into the A-share market broadened the financing channels;Third,CSPC has stimulated the enthusiasm of its subsidiaries;Fourth,CSPC has enhanced its core competitiveness by taking advantage of the spin off strategy.On this basis,this paper also draws three inspirations: First,choose the appropriate spin off business.The enterprise shall choose a subsidiary with clear business scope and strong independence to split;Second,choose the appropriate market for the spin off.The enterprise shall fully evaluate the characteristics of different capital markets and reasonably select the target market for the spin off listing;Third,we should improve the compliance of the spin off listing operation.An enterprise shall comply with regulatory requirements when it is split and listed,focusing on the independence of its subsidiaries’ business,finance and management personnel.