Research On Financial Risk And Its Prevention Of Hua Sheng Lu Feng’s Real Estate Development Projects

With the development of socialist market economy, the consumptionstructure of China’s national is constantly changing and the public’s demand forcommercial housing is also increasing, which results in rapid development of China’sreal estate industry, experiencing an unprecedented period of full bloom. The realestate industry has become one of the pillar industries of national economy for thefeature of strong impetus ability and high relevance. However, affected by the globaleconomic crisis, the real estate market with the global economic has deteriorated,accounting for the decline of commercial housing prices since the second quarter of2008. As a result, the profits of real estate enterprises will become increasinglyweakened and stuck in stagnation and even bankruptcy if capital chain is broken.Therefore, the commercial banks which fund the companies will inevitably beaffected. The real estate industry belongs to fund-intensive industry. Statisticsaccording to the relevant data, more than60%of China’s current real estatedevelopment enterprise funds come from the commercial bank loan. Thus, avoidingguard financial risk effectively and comprehensively is vital to estate developmententerprises, which has an important theoretical and practical significance in steadyoperation of the estate development enterprises.This paper clarifies correlative theories on financial risk at home and aboard atfirst. The present author uses empirical analysis and deductive research methodanalysis combined to explore the issues such as financial risk’s characteristics,production and causes as well as risk dispersion method of China’s real estatedevelopment project. At second, taking Hua Sheng LuFeng real estate developmentproject as an example, the present author introduces the basic information and marketevaluation of the project. Through utilizing the related theory and methods offinancial risk, the author analyzes the finical problems of the project on the base of theactual conditions of Hua Sheng Lufeng real estate development project. Otherwise, the paper discusses it from the perspective of quantitative analysis in terms of variousfinancial analysis indicators. What’s more, the paper presents us a further study of theproject through financial and economic analysis, break-even analysis, sensitivityanalysis, probability risk analysis. Finally, according to the detailed various financialindicators analysis of the Hua Sheng Lufeng real estate development projects, theauthor proposes the principles and preventive measures of decision-making about Huasheng LuFeng, which provides some reference for the theory development of thefinancial management about China’s real estate project.