Influence of spin-off listing on parent company

In the stock market, spin-off listing is also a listing method that many companies will adopt. Specifically, it refers to the separation of some businesses or subsidiaries by listed companies and their separate public offering. So, what impact does the spin-off listing have on the parent company?

The impact of the spin-off listing on the parent company is as follows:

The benefits of 1

Split listing can increase the financing channels of listed companies, thus increasing the financing ability of companies. The effective use of secondary financing by the parent company will increase the performance of the parent company to a certain extent. After the spin-off listing, the spin-off subsidiary will be given a higher valuation level, which will improve the valuation of the parent company to some extent. If the subsidiary's share price is ideal, it can get a good capital premium and bring excess returns to the parent company.

Two shortcomings

The spin-off listing may dilute the profits of the parent company from its subsidiaries, and at the same time reduce the holding ratio of the parent company to its subsidiaries to some extent. If the industry where the subsidiary is located is not well developed, it will also affect the operation of the parent company, resulting in a decline in the operating performance of the parent company.

Generally speaking, the purpose of spin-off and listing is to improve the core competitiveness of the parent company and make it develop faster and better. In addition, finance has become more transparent, and it is easier for investors to understand the specific situation of listed companies. At the same time, it can also provide a new way for diversified listed companies, and the split listing has many positive effects on the parent company.