ST Shenhuo's Financial Strategy Optimization Based On Vertical Integration Strategy

The energy industry is one of the pillar industries of the national economy,coal is an important basic energy of China,with the development and utilization of new energy in recent years,the demand of coal resources to reduce overcapacity,coal mining,coal industry enterprise-s squeezed profit margins,industry system risk is more and more big,vertical integration strategy can transfer the coal mining business risk.Henan Shenhuo Coal Co.,Ltd.is a company engaged in coal,electricity,aluminum integration of chemical production compared with non state-owned listed companies,the integration of coal,electricity,aluminum chemical enterprises have a cost advantage and benefits associated strong.But in recent years,Henan Shenhuo Coal Limited company is facing losses,delisting crisis,stock name change to ST Shenhuo.In order to promote the sustained and healthy development of ST Shenhuo aluminum coal integration business,this paper carries on the SWOT to analyse the Coal integrated aluminum business of ST Shenhuo.To analysis the ST 2010-2015’s financial performance and to locate the financial strategy of ST Shenhuo by the method of financial strategy matrix analysis.,looking for strategic adjustment basis and adjustment path.The study found that the capital asset growth is dependent on excessive growth of financial leverage,ST Shenhuo’s gross profit has been unable to afford the cost of capital,financial strategy in unfavorable situation the company loses value and cash surplus,investment growth is not reasonable,the debt management needs to be adjusted.To adjust the financial strategy,ST Shenhuo achieve strategic target through divestiture and restructuring means,improving the ability of sustainable development and the industry system risk tolerance.