IC200PNS002 Recently, China Southern Airlines announced the spin-off of China Southern Logistics, so that the three major airlines logistics sector is expected to gather in 2024 A shares. Looking at A shares, on the one hand, the spin-off continues to add new cases, and on the other hand, there are constantly companies pressing the spin-off “end key”.

IC200PNS002 Choice data show that in 2023, A total of 54 companies disclosed their intention to split, of which 9 have been successfully split and 13 have been terminated. In terms of the parent company’s securities regulatory Commission industry, there are 47 manufacturing companies that send their children to fly alone, with high enthusiasm, and most of the businesses to be split are strategic emerging industries. In terms of subsidiaries to be listed on the board, the attraction of the Beijing Stock Exchange has become increasingly attractive, 10 companies have clearly indicated that they intend to split into the Beijing Stock Exchange, of which 4 have been successfully listed.

IC200PNS002 The reporter took stock of the termination case, there are many factors behind the cooling of A share spin-off, and it is one of the most important factors that does not meet the relevant policy requirements. “Listed companies planning spin-off listing matters, mainly depends on the necessity of spin-off listing, as well as business independence, spin-off subsidiaries in line with the relevant sector positioning.” Said Ye Xiaojie, director of the finance department of Shanghai National Accounting Institute.

IC200PNS002

IC200PNS002 More than 30 spin-offs are on the way

Choice data shows that of the A-share companies that have disclosed their intention to split since 2023, more than 30 are still on their way. In terms of the nature of the parent company, manufacturing enterprises accounted for more than 80%, both CRRC, China Power Construction, China Unicom, Zoomlion, CIMC Group and other central state-owned enterprises, but also the United States Group, Xinwang Da, Trina Solar and other segments of private enterprises leading.

“From the spin-off and listing of state-owned enterprises leading A shares to the spin-off of state-owned private enterprises, it reflects the process of capital learning new measures of operation, and also shows the vigorous development of new businesses and subsidiaries of private listed companies.” Nankai University financial development research Institute dean Tian Lihui said.

IC200PNS002 The reporter noted that in terms of the quality of the subsidiaries to be spun off, there is no shortage of competitive “dark horses” in the core business. For example, the lithium-ion battery leader Xinwang Da intends to be spun off to the GEM listed subsidiary Xinwang Da Power, which is a platform for the company’s independent research and development, production and sales of new energy vehicle power batteries. When it completed its last round of financing before the IPO, Xinwang Power was valued at 35.5 billion yuan.

For the spin-off, Xinwang Da said that it will realize the capitalization of domestic high-quality power battery assets at the same time, and use the listed funds to in-depth research and development reserves and high-quality production capacity construction of advanced power battery technology, so as to accelerate the technological upgrading iteration of the industry.

IC200PNS002 “Overall, the split will optimise resource allocation, improve corporate governance and increase shareholder value.” Tian Lihui said. In theory, the business structure of the parent company and subsidiary company is clearer, which is conducive to improving the corporate governance level. From the data point of view, after the split, most parent companies can focus on the main business and improve operating efficiency; At the same time, most subsidiaries can obtain more autonomy and resources after the spin-off, and can develop rapidly.

An investment banker said that after the split, the proposed listed entity will have a freer structure, more independent decision-making, more independent assessment, and more conducive to seizing market opportunities, attracting outstanding talents, and facilitating financing. So before the spin-off of Dayu laser Dayu numerical control, Shengyi Technology spin-off Shengyi Electric, China Railway spin-off of high-speed rail electric, Hikvision spin-off fluorite network, etc., the parent company and subsidiaries after the spin-off have achieved rapid growth, reflecting the value of the spin-off listing with facts.