Research On Financial Strategy Of Hunan Xintian Co.,Ltd

With the advancement of China's scientific and technological innovation and the continuous upgrade of its industrial infrastructure, China's high-tech industry has experienced rapid development. The strong demand for new source materials, energy sources as well as other high-tech products creates a broadened market for China's high-tech industry; however, factors such as the global economic downturn, the intense competition within the industry, the requirement for large capital investments and high investment risk constrain high-tech companies'financial health, and sustainable development and growth. In order to respond to the rapidly changing external environment, develop competitive advantages and ensure balanced and effective project funding, high-tech companies should formulate and implement scientific and effective financial strategies. Hunan Xintian company (hereafter "Xintian"), a national high-tech company is the research subject in this paper. With financial strategy and corporate life cycle theories as guidance, an appropriate financial strategy was developed for Xintian based on its current business strategy, and financial performance.This paper is divided into four sections. The first section describes the background and implication for the research of Xintian's current financial strategy, elaborates on the domestic and international development of financial strategies and other relevant theories, and identifies this paper's research ideas and methods. The second section describes the development of Xintian's business strategy, and analyzes its internal and external environment, and current financial management performance. The third section, under the guidance of Xintian's overall business strategy, develops appropriate financing, investment and income distribution strategies for the company. The fourth section elaborates on the implementation of the financial strategy and identifies safeguards and contingency planning for the implementation of said strategy.The focus and core of Xintian's business strategy are confirmed through analysis of its strategic development and environment. This paper proposes a strategy for growth that targets the Xintian's financial management problems. The proposed strategy involves gaining access to capital through expansion of financing channels, optimizing company's capital structure, and reducing the overall cost of capital. In terms of Xintian's investment strategy, the company can achieve cost leadership through process integration; increase its market share through diversification of investments and increase production scale through strict capital budgeting and feasibility analysis, investment in production lines and other fixed assets; and improve management and work efficiency through investment in management personal and information systems. A high proportion of the company's earnings can be retained and low regular dividend plus extra dividend can be issued in order to meet the company's need for expansion and maximize shareholder value.