Reasons For Bond Default Of Yongmei Holdings And Risk Prevention Research

With the gradual development of China’s bond market,there are more and more types of bonds,accompanied by the event of corporate bond default.Since most of the past bond defaults occurred in private enterprises,coupled with the public’s belief that the government will provide implicit guarantee for state-owned enterprises,investors generally prefer to invest in treasury bonds or bonds issued by state-owned enterprises and central enterprises.This irrational preference leads to some state-owned enterprises with poor operating conditions can also obtain more sources of funds.In recent years,the Ministry of finance has repeatedly stressed the need to eliminate the "illusion" of central payment of local bonds and state-owned enterprise bonds and the "illusion" of the government.In addition,the rapid deterioration of multi industry economic situation caused by the epidemic has led to frequent bond defaults,especially since 2020,many bonds issued by state-owned enterprises with high ratings have defaulted one after another.From the first bond default in the bond market in 2014 to 2020,a total of 46 bonds with the highest credit rating at the time of issuance had substantial default in six years,including 32 in 2020 alone,accounting for about 70%.In November 2020,the state-owned background entities with high credit rating,including brilliance automobile and Yongmei holdings,successively defaulted.The default of high-rated state-owned corporate bonds is no longer an impossible event,breaking the rigid payment deadline of investors for large-scale and state-owned background bonds,causing a high degree of panic in the market.These situations have attracted extensive attention in the academic and industry.This thesis selects one of the more representative Yongmei holding bond thunderstorm events,and makes a detailed analysis from the macro environment,meso environment of the event,that is,the coal industry and Yongmei holding’s own situation,in order to deeply analyze the root causes of Yongmei holding bond thunderstorm,summarize the experience and lessons brought by the event,and put forward countermeasures and suggestions for risk prevention.（1）This thesis uses GDP and default principal and interest of domestic bonds to analyze the macro-economy.It is found that the growth rate of China’s GDP in 2020 has decreased compared with that before,and the default principal and interest of domestic bonds has reached a new high in 2020;It can be seen that China’s economic environment in 2020 will be greatly affected by epidemic situation,downward cycle and other factors.（2）The meso environment is analyzed from the aspects of industrial development environment and so on.The analysis shows that although the proportion of coal in domestic energy consumption has decreased year by year in recent years,the total coal consumption will remain unchanged.Using Porter’s five forces model to analyze the coal industry,it can be seen that the horizontal competition is the most intense in the coal industry.The industrial chain of the coal industry is long and the return speed of funds is slow.Coal enterprises should pay attention to the capital liquidity of enterprises to avoid capital fracture.（3）Through the study of micro indicators,it is found that the profitability,solvency and capital liquidity of Yongmei holdings are at a poor level.This thesis uses F-score model to study the capital situation of the company,and the results show that the company does have insufficient liquidity.Through comprehensive analysis of the reasons for the poor performance of profitability and other data,it is found that the profitability of other business sectors of Yongmei holdings except the coal sector is not strong,and the profitability of the group depends on the coal business;There are huge amounts of other receivables from related parties and a large number of restricted assets,resulting in poor liquidity of Yongmei holdings.The study also found that the indicators used by China integrity international for rating have a certain lag and are not comprehensive enough.At the end of the article,according to the above analysis results,this thesis puts forward risk prevention measures for bond issuing enterprises,investors,rating agencies and the government,hoping to warn other bond issuing enterprises with similar situations,provide enlightenment for credit rating agencies and investors in China’s bond market,and provide decision-making reference for our government.