Motivation and Economic Consequences of “A-split A” Listing: Take China Railway Construction Co., Ltd. as an Example

Abstract

Based on the policy background of “several opinions of the State Council on the high-quality development of capital market” (the new “nine articles of the state”), this study takes China Railway Construction’s spin-off from the railway construction heavy industry as a case to systematically examine the impact of strengthening supervision on the “A-split A” model. By integrating the theoretical framework of spin-off listing and using the method of financial index analysis, the study found that the spin-off case failed to produce significant positive economic benefits. The empirical results show that in the current strict regulatory environment, the spin-off listing strategy of enterprises needs to break through the restrictions of the A-share market and explore more diversified capital operation paths. The supervision of spin-off listing in China is stricter than that abroad, although it can bring multiple benefits to the parent company. In December 2019, the Securities Regulatory Commission issued several provisions on the pilot listing of subsidiaries of Listed Companies in China, which clarified the requirements for domestic spin-off for the first time. In April 2024, the new “national nine articles” further strengthened the continuous supervision standards of listed companies. Under the strong regulatory policy, some enterprises have shifted from listing on the Shanghai Stock Exchange and Shenzhen Stock Exchange to the Beijiao stock exchange or the new third board with a lower threshold and faster audit, which has led to the cooling of the “A-split A” market. Based on the above research background, this paper focuses on the motivation and economic consequences of the “A split A” listing of China Railway Construction Co., Ltd., to provide experience and suggestions for other Listed.