Measure Research Of Credit Risk Of Real Estate Listed Company Based On KMV Model

In recent years with the rapid development of China’s real estate market,themarket bubble is pushed up by the over-expansion of the real estate market.It’sbecome true that the prices is going up too quick and too high,and also thesecompanies are facing some serious problems of credit which is broght by theadjustment of policy.Since2010,the state has introduced a number of severe realestate control policy. With the policy of continued tightening in the role ofmacro-control,the problem of capital chaine has become more and moreserious,some part of capital chaine is at the edge,the credit risk has increasedsuddenly.So it’s necessary to give a measurement and analysis of the real statecompanies.In the background of the prices adjustment,this context will choose the modelKMV which is considered to be in accordance with China’s situation.According tothe59listed real estate companies in China’s stock market information and financialdata,we will give a measurement and analysis which including breach of contract andtheoretical probability of default since2008to2011for every sigle year,we will usethe result as a measure of the company’s credit risk profile.The empirical resultsshow:In2008China’s real estate market have a obviously hihger credit risk.In2009and2010the situation has been gradually better.Facing the new complex situation in2011,the trend of the credit risk of the real estate companies show a greatdisagreement.Some companies continue a good development trend of the first twoyears, the credit risk continues to decrease slightly or remained relatively stable asbefore,while others credit risk is getting worse rapidly,some are even worse than2008.In this paper we firstly do an analysis which shows that the subprime mortgagecrisis in2008caused a upgrage in the credit risk and it’s why we saw a verticalmovements of the market.In2009the government introduced policies to rescue andalso stimulated the real estate market,so sufficient funding and a hot market dicreasedthe credit risk in market.But by2010the government introduced a series of regulatorypolicies to reverse the pattern of the market,because of the time lag of the policy,somecredit risks began to appear in2011.On the other hand, for some samples companieswho have a totally diferent situation in credit risk, this paper use points ofmicro-economic to give a comparison and analysis.It’s been foud that in company size, the main business area and type of analysis,also in short, medium and long-termtheir capabilitise which defend the credit risk are different.Accordingly,we bring some advices to prevent the crdit risk in the real estatemarket:take attention to the state macro-control policy and improve the businessideas;Broaden the financing channels, improve capital operation;Improve theinternal management system and develop to meet market demand for products andservices; Reduce land holding, improve the efficiency of capital return.