Case Study On The Sichuan Development (Holding) Co., Ltd

In this thesis, a case study is performed on Sichuan Development (Holding) Co., Ltd.(hereinafter referred to as Sichuan development), the only province-level financial platform.Financial platform is one of the important sources where government funds for infrastructure development come from. Financial platform plays an active role in promoting local investment and stimulating local economy growth, but also exposes systematic problems like low return over investment, low solvency and so on. With the tightening of macroeconomic policies, Investment and financial platform, the product under the background of massive investment, has attracted great concerns of central government. How to treat the active role of the platform properly and how to prevent the risk in the platform is of great interest. After Sichuan Development has completed the periodical financial target from the provincial government, how the company should transform itself, strengthen its operation and business innovation has become an important issue.In this thesis, problem in current financial platform is identified and analyzed by the case study of Sichuan Development. Feasible suggestions are proposed to provide reference of financial platform operation in China.Based on the overview of models of financial platform operations, this thesis summarized the basic profile and current operation of Sichuan Development.In the first part of the paper, a review is conducted on the background of establishment, divisions of the company, market position, department set up, strategy deployment and previous accomplishments to summarize the achievements made by Sichuan development since establishment. Analytical Hierarchy Process (AHP) is used as the method to determine the weight of each element and marco-, meso-and micro-risk indicator warning boundaries of financial platform is set. Based on actual data, a conclusion that the operation of Sichuan development is safe overall with potential risks is reached and support is provided for the risk warning of Sichuan development financial platform.5aspects of problem are found, including loose management of Sichuan development, inefficient operation and management of funds, latency of registered fund installment, poor communication with the funding company and risk of tightening policies. In the following part, suggestions on the management issues are proposed, guided by the market-oriented idea. To address the day-to-day operation issue, it is suggested to manage the facility balance meticulously, conduct good cost control and increase the revenue from investment business. To address issue of fund management, it is suggested to build and improve a physical fund pool and speed up the establishment of a financial company. To address the issue of poor communication with the funding company, it is suggested to strengthen the linkage of the funding company as an industry cluster. To address the fund raising issue, it is suggested to make a breakthrough as soon as possible. To address the issue of stock assets in Sichuan development, it is suggested to revitalize the stock assets, diversify the equity and make a breakthrough on securitization. To address the future development of the company, it is suggested to transform to a financial holding company and learn experience from the operation of other provincial financing platform.In the field of financial platform research, previous studies mainly focused on external factors like policy and economy with little or none insight into the internal operation of the company. The innovation of this thesis is to conduct a research on the only comprehensive financial platform in Sichuan, expanding the breadth and depth of research on financial platform and perform a case study. By combining the qualitative and quantitative analysis, the research is more comprehensive and in-depth and case-specific.Due to the limitation of the author’s knowledge, it is inevitable that there might be some misunderstanding and errors. There is still a lot of room for improvement and suggestions are mostly welcomed from evaluation experts and the respondent experts. The author will enrich and improve himself in the future life and study.