A Case Study On Sunac Investing In LeEco

In recent years,the central governnent has issued a series of policies to curb the excessive rise in housing prices,resulting in more and more expensive land prices and higher financing costs in the real estate industry.Under such circumstances,many real estate enterprises are facing transformation in order to reduce the risks brought by policy changes and seek diversified development of enterprises,which will inevitably bring cross-industry equity investment behavior to the real estate industry.However,the success rate of cross-industry investment is still at a low level compared with that of the same industry,and there are few relevant documents.It is urgent to sum up experience and lessons.Improve the success rate of investment.It is against this background that this paper chooses Sunac as a typical case to study.Sunac and LeEco are both listed companies.This investment is the first time that Sunac invests in non-real estate business.It is also a new attempt for Sunac to develop into the entertainment industry in order to seek business diversification.However,at present,the results of investment are unsatisfactory.Scholars generally believe that it is a failed investment.Through the analysis of its investment motivation,investment performance and investment problems,this paper summarizes the matters needing attention and the problems that easily appear in the cross-industry investment of real estate enterprises,in order to enrich the relevant literature,provide theoretical basis,and provide countermeasures for the future investment behavior of Sunac,so as to effectively reduce and avoid the improper possibilities of enterprises in the investment transaction activities due to the improper choice or way.Losses to enterprises.This paper uses literature research method and case analysis method to study.Firstly,on the basis of clarifying the research framework,it combs and summarizes the literature on investment and M&A related to Sunac and LeEco in recent years,and defines and differentiates the relevant concepts involved,as well as introduces the relevant theoretical basis.Secondly,in the process of introducing the case,the paper analyses the motivation and financial performance of Sunac's investment,and then draws out the problems involved in investment.Finally,the corresponding investment countermeasures are put forward to solve the problems in the process of Sunac's investment pleasure.Through a series of analysis and research,the paper draws three conclusions about investment motivation,investment performance,investment problems and countermeasures.The purpose is to provide some reference for the transformation investment of real estate enterprises in China by analyzing the cross-industry investment cases of real estate enterprises.