Empirical study on the impact of major asset restructuring on the price of sub‐new stocks in Chinese A‐shares

Abstract

With the improvement of Chinese economic status, Chinese A‐share market has attracted more and more attention from international investors. Sub‐new stock is a general name for the companies which list less than a year, most companies of this category come from the China Growth Enterprise Market (GEM) and are high‐tech companies with high growth. To study the influence of major asset restructuring on the stock prices of different companies, this paper adopts the event study method to calculate the samples' abnormal return in a 20‐day window period, compares related party transactions and unrelated party transactions, as well as different payment methods for the restructuring. The analysis shows that the listed companies of Growth Enterprise Market can get higher excess returns, the sample of unrelated transaction obtains more abnormal income than the sample of related transaction. The research can provide a reference for local and international investors.

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“…Sub-new stocks are stocks listed for less than one year. Compared to stocks listed for longer periods, the price trends of sub-new stocks are more volatile, allowing investors to profit from short-term trading (Mingli et al 2022). Consequently, predicting the price of sub-new stocks can be valuable for both stock traders and quantitative finance researchers.…”