Research On Financing Problems Of Water Supply Company Of Shiyan,Shenzhen

With the rapid growth of China’s economy and the process to urbanization,more and more industrial water and living water is needed, this is not only anopportunity, but also a challenge to many water companies. Increasing the supply ofwater create more profits, but in the existing production conditions, the water supplyenterprises need fund to update equipment.Tap water industry is the industry of the price controlled by the government, theprice of tap water is not decided by the supply and demand, but by the governmentdepartments according to consumers’ bear ability. Tap water company has lowprofitability, the pipeline construction need a large amount of fund investment,however,when the project is completed which will bring the relatively cash flow.Dueto the particularity of water industry, water supply enterprise often in a state of loss orhave little profit, so it is difficult for the water supply company to raise enough moneyto meet the demand. In addition in recent years the fiscal revenue form thegovernment in the proportion of GDP is on the decline, the government invest towater supply enterprise is limited. ALL of the these intensifies the water supplyenterprise financing difficulties.Tap water company of Shiyan servicing for the city residents of Shenzhen, italways try its best to provide high quality services, however,it has also face a seriesof problems. Financing problem is the primary problem: financing channel is a single,excessive dependence on group capital; Enterprise financing structure is notreasonable, Financing way lack of innovation; The folk capital intervention’senthusiasm is not high. This article based on the above question put forward thefollowing countermeasures: abandon the traditional ideas, adopt diversified financingmodel, a variety of financing mode and, such as policy bank loans, the group to issuebonds, asset securitization financing, project financing, lease financing, etc.The tap water company of Shiyan is not also update financing ideas, and broadenthe financing channels, actively looking for all kinds of suitable financing way, butalso should try to improve their management level, strengthen the company’s internalmanagement. Plus, because of the particularity of the water supply industry, thecompany should adopt diversified development strategy, in order to supply as its mainbusiness, Due to the water supply has certain external effect, pricing is decided by thegovernment, the enterprise and the consumer common, the price is generally lower, the water supply enterprise’s profit ability is relatively poor, so the company shoulddevelop and supply relevant services to improve the company’s overall profitability.