Research On Financing Strategy Of PuNeng International Power Company

In recent years,the domestic economic situation has become a new normal and economic growth has slowed down.Under the background of the “Going Global” and “Belt and Road” strategies of the country,the state-owned power companies are prepared for dangers in times of safety,strategically deploying them in advance,actively seeking a broader overseas market for the use of stock assets and human capital,and striving to achieve global electricity and energy interconnection.The report of the Nineteenth Congress put forward that we should better adhere to the combination of bringing in and going out.Chinese companies should accelerate their globalization process,effectively promote the integration of technology,management,and capital,and provide Chinese standards,Chinese wisdom,and Chinese programs.However,there is still a certain gap between China's state-owned power companies' international level and world-class multinational companies.At this stage,most projects undertaken by state-owned power companies in the process of their internationalization are concentrated in these underdeveloped countries in Asia,Africa,and Latin America.These countries have a large demand for infrastructure,but they generally have tight financial resources,high government debt,and sovereignty.With low credit rating and high political and economic risks,its own financial strength is not enough to support large-scale infrastructure construction,which requires our power companies to improve their financing capabilities.PuNeng Power International has mission to drive our country's power equipment,design,consulting and construction companies to go abroad.We must achieve coordinated development with our financial institutions to open upstream and downstream industrial chains,and strive to achieve global power energy interconnection.With the rapid expansion of PuNeng's international market share and the gradual expansion of its business scale,the demand for capital has become increasingly strong.There are many problems with the company's financing model,and the diversified financing level is still in its infancy.This article takes PuNeng International as the research object,analyzes the company's capital structure,finds its existing financing problems,analyzes the causes of the problems,and proposes solutions.This article elaborates on the development of corporate financing and project financing theory,sorts out related documents,and finds out the causes of PuNeng International's financing problems and their solutions.First of all,the description of PuNeng International's financing status shows that the company's existing problems are: Its own funds are difficult to meet the needs of project construction funds.The proportion of debt financing is too high.In debt financing,bank-based short-term liquidity loans are again the main source of funds.The capital cost is relatively high,and the funding period does not match.The financing channels are narrow,and there is no direct way to raise capital through the capital market,and the fund raising efficiency is not high;the traditional financing model of state-owned enterprises is more dependent.Lack of innovative financing models;frequent financing risks.Secondly,in light of PuNeng International's existing problems,the causes behind the company's financing problems are identified: the fierce competition in the international engineering market,the frequent occurrence of low-price bids,the rising cost of labor services in China,and inadequate inspections of the country where the project is located.Project delays are not strong enough for claiming claims.The previous project equipment investment is too large.No follow-up project follow-up equipment is stuck in the country where the project is located.The above problems form the reasons for the decline of the company's profit rate and the lack of internal financing;transitional dependence on bank short-term loans and groups.The company guarantee issued large amount of guarantee financing,the development of the domestic bond market is relatively sluggish,and the cost of issuing bonds is relatively high,resulting in an unreasonable company's debt financing structure;less involvement in innovative financing models,and limited support for financing of international projects by domestic financial institutions.The mode of financing is single;lack of detailed financing risk control plan,insufficient attention to financing risk,resulting in frequent financing risks.This paper has planned the financing strategies of PuNeng International from four aspects,namely,promoting the reform of mixed ownership through electricity marketization,and diversifying equity ownership by introducing strategic investors to capitalize on capital market financing;and on the one hand,it optimized the debt financing structure by attempting to issue corporate bonds overseas,with a view to reducing capital costs and financial risks.The third aspect was to try a hybrid financing approach,that is,a PPP project financing model,and to use policy-oriented investment and financing institutions to broaden financing channels.Improve the reserve of innovative talents,cooperate with domestic financial institutions to achieve a win-win situation and broaden the financing model.The fourth aspect is to improve the internal financial risk management and control of enterprises by formulating financing risk plans.It is recommended that PuNeng International cooperate with each other through multiple financing methods to integrate resources and broaden financing channels so as to ensure sufficient company funds and enhance international competitiveness.It hopes to provide reference and reference for similar enterprises.