Research On Performance Commitment Risk Management In Meinian Health Backdoor Listing

With the increasing scale of M&A transactions and the increasing number of M&A transactions in China’s capital market,the performance commitment system has been widely used to protect the rights and interests of minority shareholders.For the acquired party,on the one hand,the higher the goal of performance commitment,the more it can show its future profitability,and performance commitment can be used as a tool to transmit positive signals to enhance the stock price;On the other hand,the performance commitment plays an incentive role,which can motivate the acquired party to make efforts to realize the performance commitment to a certain extent.However,due to the information asymmetry between the two parties,the actual application of the performance commitment system is not optimistic.The result of the M&A game between the two parties is often high valuation and high performance commitment,which leads to management behavior risk.Therefore,how to identify the performance commitment risk in the process of M&A and how to deal with the identified risk points in the performance commitment agreement is very important.Taking Meinian Health’s backdoor Jiangsu Sanyou as an example,this paper studies the performance commitment risk in the process of "performance change face" after Meinian Health’s "accurate standard".In the process of case analysis,this paper takes information asymmetry theory,signal transmission theory,risk management theory and hierarchical holographic model theory as the theoretical basis,which runs through the whole case analysis process.Firstly,this paper uses HHM framework to identify the risk points in the process of performance commitment,and carries out risk assessment on each risk point;Then,according to the performance commitment agreement signed by Meinian Health and Jiangsu Sanyou,it analyzes how the two parties deal with the identified risk points.Finally,this paper summarizes the advantages and problems in the process of Meinian health risk management.Through analysis,it is found that,on the one hand,for the identified risk points,although relevant clauses are set in the performance commitment agreement,there is still the risk of overvaluation of the benchmark assets,single performance commitment index and too high target value;On the other hand,the two parties to the transaction did not take measures to deal with management behavior risk,market risk and financial performance decline risk.It can be seen that although Meinian Health Performance Commitment Agreement has alleviated the information asymmetry to a certain extent,it has failed to implement effective response to all risk points.Through the analysis of this case,this paper draws lessons from the valuation of the underlying assets,performance commitment setting,management behavior and performance change.Through the research on the risk management of performance commitment in the backdoor listing process of Meinian Health,it is expected that it will help to identify the risk points of performance commitment,and when setting the performance commitment clauses,it can take precautions against the relevant risk points,so as to truly reduce the information asymmetry between the performance commitment party and the promised party and the minority shareholders.On the other hand,it can popularize the relevant contents of China’s performance commitment system for investors,and provide a new perspective for the majority of small and medium shareholders to look at performance commitments,so as to make correct investment decisions.