Study On Motivation And Effect Of Major Shareholder’s Reduction In Kangchen Pharmaceutical

The split share reform fundamentally solves the problem of separating circulating and non circulating shares in China’s immature market,and shareholders can freely transfer company equity.The realization of full circulation of stocks has increased the activity of China’s stock market.As a major shareholder of the company,it holds an important position in the operation and management of the enterprise.Frequent reduction of holdings by major shareholders and a high proportion of reduction will have an impact on the company.The reduction of holdings by major shareholders cannot be underestimated.In recent years,scholars have begun to pay attention to the reduction of major shareholders’ holdings,but their views on how the reduction of major shareholders affects the development of companies are currently inconsistent.Therefore,studying the motives and effects of major shareholder reduction is of great significance for the healthy development of companies and the stock market.In this paper,Kangchen Pharmaceutical,a company in the biological products industry with frequent and highest reduction ratio of major shareholders,is selected as the case study object to analyze the motivation of major shareholders’ reduction and its financial and non-financial effects on enterprises.Firstly,analyze the overview,reduction process,and motivation of Kangchen Pharmaceutical;Then use EVA and factor analysis to analyze the impact of Kangchen Pharmaceutical’s major shareholder reduction on the company’s financial performance;Finally,we use event study,comparative analysis and other methods to analyze the impact of Kangchen Pharmaceutical’s major shareholder reduction on the non-financial effects of the enterprise,including market effect,corporate governance and minority shareholders’ equity.Through research,it can be concluded that the reasons for major shareholders to reduce their holdings include overvalued companies,declining business performance,and a single profit product;The financial effects caused by the reduction of holdings: the financial effects in 2019 and 2021 were relatively positive;2020 is a negative effect;Non-financial effects: There are more negative effects in the short-term market,but weaker positive effects in the long-term market,weakened corporate governance level,and damage to the rights and interests of small and medium-sized shareholders.This article focuses on the above analysis and proposes corresponding suggestions,hoping to provide suggestions for the healthy development of Kangchen Pharmaceutical,the biological product industry,and the stock market.