Trade Finance Innovation Studies Of HS Juice Company

As the rapid development of export trading, the engine of China's booming economy, a small industry, namely the concentrate juice manufacturing, has sprouted recently in Shaanxi province. Capitalize on their completive advantages and the bountiful supply of raw materials, Shaanxi-based concentrate juice manufactures sliced half of the industry's the global trading revenue. Among the industry's leading companies is Shaanxi HS Juice Company (HS Juice). HS Juice has been the largest concentrate juice supplier in the world five years in a row. However, inadequate collaterals and the resulting financing shortfall have become the bottleneck of HS Juice's meteoric growth rate. Therefore, a research paper on the feasible financing options available is of great importance to the company.This paper investigates the most pressing financing management problems facing HS Juice. To arrive at creditable solutions, the author compared the various trade financing alternatives proposed by relevant trade financing literatures, analyzed the status quo of the company's financial management and financing methods, and examined the internal/external influencing factors. The author suggests that HS Juice could estimate the level of financing needed by the percentage of sales method. Huge inventory holdings due to the lag between "seasonal production and year-round sales" and accounts receivable owed by quality trading partners can be used as collaterals to seek capital injections from banks, logistics companies and China Export& Credit Insurance Cooperation. HS Juice ought to also consider utilizing new guarantee methods, such as inventory collateral and export credit insurance, to overcome its financing bottleneck. At the same time, HS should customize an appropriate and applicable trade financing combination to forge an executable financing plan, which will facilitate a sustainable growth and generate greater foreign currency denominated revenue.A structural trade financing portfolio based on the paper should be conducive for HS Juice to explore new financing sources.