A Case Analysis On The Expansion Of China's Real Estate Companies And Their Financial Strategy

The method of land reserve of real estate industry decides the financial characteristics of heavy assets and low turnover. The high turnover in America's real estate business not only due to business model and strategies related to land, but also be attributed to the developed financial market and flexible financial instruments, such as equity securities, land options. Currently, the domestic real estate market competition has intensified, real estate enterprises survival of the fittest, real estate developers increasingly focus on the development model and financial strategies. Corporate finance is financial issues which are related with the company's operation activities. Corporate financial strategy is summed up in two structures which should be grasped: Capital structure and Ownership Structure.This paper focused on the real estate company's financial strategy development, and influence in real estate expansion. Corporate financial strategy is a profound impact on the competitiveness of enterprises and their values. Financial resources as a brand carrier, pave the way for the expansion of brand value. This paper analyzed that Chinese real estate companies financial strategy should pay important attention to the risks and rewards, that are, the ROE and Z value-bankruptcy risk factor. China's real estate industry has been recognized as one of the highest risk industries, and how to avoid the risks is the problem that the property business has to consider when choosing competitive strategies.This paper systematically expounded on the limit rate of expansion in the real estate industry. Each real estate enterprises have a limit rate of expansion, which is the essence of this industry, which is the financial industry constraint to expand. This paper analyzed that the limit rate of expansion depends on two factors: the turnover of assets and the profitability. Low turnover rate of expansion can not be healthy; as the same turnover, the limit rate of expansion can improve with the profit margin increasing. Turnover of capitals and operating profitability are complementary to each other, which provide leeway for the real estate business to choose strategies. In addition, the real case analysis of Poly Real Estate Group Co., Ltd. is also introduced in this thesis. Through the comparative analysis between Poly and Vanke- the benchmarking of real estate companies in mainland of China, this paper analyzed the operations, the operating strategy and the advantages and risks when expanding of Poly, and elaborated the effects of the implementation of Poly's financial strategies in its expansion.