Performance Study Of Greentown Services Spin-off Listing

In the context of China’s "property boom" gradually cooling down and the increased burden of most real estate enterprises due to diversification,China’s property management industry has entered the vision of entrepreneurs with its long life cycle and the advantages of rapid growth brought by value-added services combined with the Internet,and they believe that the spin-off of the property sector to go public can solve the negative impact of diversification of real estate enterprises while enabling property to enter the capital market and obtain rapid development capital,creating a new economic growth point.They believe that the spin-off of the property sector can solve the negative impact of diversified operation of real estate enterprises and at the same time enable the property to enter the capital market,obtain the capital for rapid development and create new economic growth points.Therefore,real estate companies have started to solve their corporate development problems and improve their performance through divestment.Therefore,this paper hopes to analyze whether and how the spin-off can improve corporate performance through the study of Greentown China’s spin-off of its property segment,Greentown Services,in order to provide a reference for other companies to be spun-off.Based on risk segregation theory,market value management theory and nucleation strategy theory,this paper argues that a spin-off improves corporate performance through three logics: financing effect,risk segregation and improving management efficiency and operational capacity.Through the case study method,we take the spin-off of Greentown China from the listing of Greentown Services as an example and analyze how the spin-off improves corporate performance by improving these three logics,and then through Then,we analyze the results of its spin-off through event study method,comparative analysis method,simplified EVA and Z-value model.First,in terms of capital market response,the Z-value model found that the financial risk of Greentown Services became smaller after the spin-off,and the event study method found that the spin-off could bring excess earnings,while the P/E ratio of the spin-off subsidiary increased rapidly.In the financial capability analysis,through the horizontal and vertical comparative analysis method,it was found that the financing ability,operation and management of Greentown Services were improved,the financing ability of Greentown Services was enhanced,the operating income increased and the investment loss decreased,the cash flow grew rapidly but the capital utilization rate did not decrease,the debt servicing ability and growth ability were enhanced,and finally,the long-term enterprise value analysis was conducted through the simplified EVA It was found that the long-term value of Greentown Services increased after the spin-off.In terms of non-financial value,Greentown Services maintains its leading position in the industry,improves its brand value,optimizes its business structure,and rapidly expands its market scale after the spin-off.Through specific analysis,it can be seen that the spin-off of Greentown Services is a relatively successful case of spin-off and concludes that analysis of the spin-off can improve corporate performance.This paper provides a model for subsequent successful spin-offs by studying the spin-off of Greentown Services,and finds that spin-offs have a risk-isolation effect in the real estate industry,which can provide ideas for real estate companies to diversify their risks.However,the main analysis of this paper is from the perspective of the subsidiary,and its impact on the parent company is subject to further study.