Financial Strategy Research Of The Real Estate Listed Companies

Currently, there are huge changes of the world economy status. The internationaleconomic standing of China gradually improved with markets being more open andglobalization being more significant. Internal and external environment the companies facedwith is changing sharply. If the companies did not adapt to changes and adjust their strategies,they will be eliminated finally by the market. Financial strategy is an extremely important partof company strategic management. The success of a firm is highly relevant to its selection andimplementation of financial strategy. As the listed real estate companies have large demand ofmoney, strong relevance of industries and high risk of investment, it’s even more critical forthem to select and implement appropriate financial strategy to achieve sustainable growth inthe value of the company. However, the environments which the real estate listed companiesfaced with are not the same, different types of real estate listed companies should choosedifferent financial strategies. Therefore, the companies should be studied by classified groupswhen we do researches on the financial strategy of real estate listed companies.Based on the strategy management theory and financial strategy matrix theory, this thesissummarized the dynamic of financial strategy research about the real estate listed companiesboth at home and abroad, analyzed the factors that affected the election and implementation ofthe real estate company financial strategy, using the method that combines qualitative analysisand quantitative analysis. And then, according to the financial data from2008to2012of91sample companies, it calculated the sustainable growth rate for each of the sample companiesfrom2008to2012, using the sustainable growth model of Robert Higgins. After that, itconducted Wilcoxon test to the two related sample data of actual sales growth and sustainablegrowth, return on invested capital and the weighted average cost of capital.At last, based onthe perspective of sustainable development, this paper classified the real estate listedcompanies into four groups with the value creation-growth rate matrix theory and empiricallyanalyzed various financial strategy status of each group.Empirical research shows that: the government policy affects the growth in sale of thecompanies and the overall growth was excessive. The overall rate of return on invested capitalwas consistent with the cost of capital of the real estate listed corporation, ensuring thepreservation and appreciation of the capital invested by investors. Further studies have shown that the majority of listed real estate companies have implemented appropriate financialstrategy. However, the value-created and cash-strapped companies had adopted anunreasonably high dividend payout ratio, value-decreased and cash-strapped companies hadan over-investment problem.