| Shenzhen Investment Limited (hereinafter referred to as "Shenzhen Investment") and the other real estate enterprises in Mainland China are experiencing an environment of changes in macroeconomic growth models in China, decline in accelerated economic growth, continuous industry regulating policies and intense industry competition. How to achieve its self-sustainable development through visionary financial planning, comparing and contrasting with benchmark enterprises in the industry, enhancing financial performance, formulating appropriate financial policies and prospective financial strategies is a severe issue that every real estate enterprise needs to think of. In this article, leading industry player China Resources Land Limited (hereinafter referred to as "CR Land") has been selected as the benchmark for comparison purpose for Shenzhen Investment, it focuses on analyzing the financial statements, financial indicators and financial indicators affecting factors of Shenzhen Investment and CR Land from2008to2012, compare and study the financial performance, financial policies and financial strategies of the two enterprises. Through system interpretation, it diagnoses the financial conditions of the two enterprises. It explores the in-depth factors that affect the differences of the financial conditions of the two enterprises, attempts to provide recommendations regarding the future sustainable development of Shenzhen Investment.Through comparative analysis, a conclusion is reached as follows:As to the five aspects of financial performance, namely profitability, cash generating ability, value creation ability, risk control ability and growth ability, Shenzhen Investment are all inferior to CR Land. As to financial policies such as working capital management policy, debts policy, dividends policy and investment policy, Shenzhen Investment is weaker than CR Land in terms of efficiency and effectiveness. As to value creation and cash flow status, both enterprises are value creating enterprises, however, the value creation ability of Shenzhen Investment is inferior to that of CR Land. Shenzhen Investment has greater funding shortage than CR Land. The fundamental causes of these differences are correlated to the background, corporate strategy mechanism, business model and internal control, capital structure and financing channels of Shum Yip Group Limited (hereafter referred to as "Shum Yip Group"), the parent company of the subject matter and China Resources (Holdings) Company Limited (hereafter referred to as "CRH") respectively. Based on the above analysis, in this article, we recommend that Shum Yip Group should enhance its resources capability while Shenzhen Investment should optimize its development strategies in operating the products professionally, constructing regression layout, seizing strategic support, transforming business model and establishing strategic synergy with its parent company. We also recommend Shenzhen Investment to optimize its debts policy through financing strategies, financing channels, cash flow management, advanced receipts and accounts payables, optimize its working capital policy through inventory management, land reserves structure optimization, expenses management and control for any period, operation pace and liquidity efficiency and comprehensive tax planning, optimize its dividends policy through increasing the proportion of retained profits, optimize its investment policy through increasing its property holding, disposing of low efficient long-term equity investments and optimize its enterprise management through improving its management and control, professional capability and perfect its internal system. |
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