A Study On Financing Strategy Of China Vanke Co., Ltd

In the process of a company development, adequate sources of funding and the well-established capital chain are very important. Capital, market and land are known as the three basic elements in the real estate industry, which is also called the capital-intensive industry because of its huge capital investment. Due to the cyclical fluctuations in the market price, the rise and fall of the real estate industry is also closely related to the economic environment, the market environment, the policy environment and the legal environment, and therefore it must be based on the above-mentioned environments that the real estate enterprises are facing, to adjust the financing strategies in the real estate business.This paper makes the study on the Vanke’s financing strategies. The paper is divided into six parts.Part one is the introduction, which is mainly on the background and significance of the theme, the current research and research methods.Part two is the basic theory of financing. It analyzes the characteristics of the capital demand for the real estate industry, the payment characteristics of operating funds, and the requirements for financing. Then it leads to the relevant theories of financing in real estate companies. These theories include the level theory, the new pecking order theory, the agency cost theory, the control theory, and the project finance theory.Part three is the classification of financing in real estate companies, modes of financing and factors that affect financing. The main modes of financing in real estate companies are:bank loans, public financing, issuing corporate bonds, real estate trusts, financial leasing, real estate investment funds, co-financing and building contractors. The main factors affecting the financing in real estate companies are:the policy environment, the economic environment, the financial market environment, the land policy, and the tax policy.Part four is a study of Vanke’s financing strategies, which is the focus of this paper. In this section, it analyzes the financing situation faced by Vanke in different environments, and then analyzes the Company’s financing situation under internal financing and external financing conditions, pointing out the successful factors and its problems. Finally, it makes an analysis on Vanke’s future financing strategies from the perspectives of internal financing and external financing.Part five is the research on Vanke’s risk control of financing. Financing risks exist objectively in business. In this section, it studies the measures for Vanke’s financing risk control from two aspects such as the financial risk control, the financial risk control and management risk control.Part Six is the reference value of Vanke’s financing strategies to other companies in China’s real estate industry.The economy of today is not optimistic, either at home or abroad. China’s real estate companies are also facing the monetary stringency. The development of the real estate industry is closely related to the economic environment and the policy environment. To ensure the normal operation of their funds, companies must constantly adjust the financing strategies according to these environments. A successful company, to some degree, depends on the sources of its funds and the ability to predict the market. In this paper, with the analyses of Vanke’s financing strategies and financing risk control, it tries to make helpful reference on the matter of financing for other real estate companies in China.