Case Study On Long-Term Equity Investment Management Operation Mechanism

Under the conditions of market economy, production and business activities of the Chinese enterprises have become more diversified,faced with the choice of the restructuring of nation-owned enterprises, now many nation-owned enterprises prefer long-term equity investment. Long-term equity management and the optimization of internal resources play an important role of enhancing the core competitiveness. Establishing a scientific and effective long-term equity investment management model and risk control system help enterprises strengthen the long-term equity investment management and risk control, corporate assets, increase the value, which is full of strategic importance. At the same time, the nation-owned enterprises equity investment management is one of the favorite research topic among domestic enterprises management experts in recent years.This thesis still aims at long-term equity management for research, however it selects an agricultural core local nation-owned company which is across many fields as a case sample, making comprehensive analysis of financial indicators on the performance of the operation and management mechanisms of internal equity and risk. And the novelty remains.FX Agricultural Development co., LTD., which is short for FX company, is one of the leading state-owned enterprises in Fengxian Biotechnology Park in Shanghai. Since it was founded, FX company kept joining in equity investment actively. However, it didn’t lift equity investment to the company strategy, so FX company lacked systematic long-term equity management consciousness for a long time. After2011, the managing hierarchy realized the importance of making a good mechanism about long-term equity investment and controlling the related risks with the expansion of company and the development of Market Economy.On the basis of it, the paper sets several targets bellowed:First, we will analysis thoroughly the current situation of long-term equity investment management about FX company through the research of long-term equity investment management operation system and risk management theory at home and abroad. Second,we will design a set of targeted long-term equity management operation mechanism which put FX company as a sample. Then,we will study the change of its subsidiaries’performance which is brought by the mechanism. third, we will identity and control the risks about long-term equity investment. With the result of the research, the managing hierarchy can improve the long-term equity investment in daily business, and further improve efficiency of the company, which is also a good recommendation to another enterprise owned a few of subsidiaries in different industries.This paper mainly consists of six parts. The first part is introduction, it mainly discusses the topic background, significance, research objectives and contents, research methods and ideas; The second part is the introduction of relevant theories and the home and abroad research were reviewed; The third part is the status quo of the long-term equity investment of the FX company; The fourth part is analysis of the long-term equity investment management operation mechanism and operation performance evaluation of the FX company; The fifth part is the risk of equity investment, case assessment and risk control research; The last part is the conclusion and enlightenment.This paper draws the following conclusions through the research:the FX company long-term equity investment has problems ofrisk. But through a series of management measures, FX company has formed the suitable for their own long-term equity investment management operating system, and achieved good operating performance. Through the adjustment and innovation of management mode, FX company shuts down risky subsidiary and controls the risk of subsidiary effectively.