Study On Financial Risk Of Evergrande Group's Diversification Development

With the gold-plated era of China's real estate development entering the adjustment period,the policy risks and industry risks faced by real estate companies are rising.The head real estate companies represented by Evergrande Group have tried diversified industrial layouts to diversify risks and find new performance growth points.However,diversified development means that real estate enterprises should expand the scale of investment in other industries and enter new industries,adding new financial risks to real estate enterprises that are operating at high debt levels.The largest diversified industrial layout of Evergrande Group and the most extensive real estate enterprise in the layout industry are the best examples to study the financial risks of diversified development of real estate enterprises.Through the macro,meso and micro perspectives,the background of Evergrande Group's diversified industrial layout is analyzed.It is believed that the diversified development of Evergrande Group is driven by the competitive pressure of the real estate industry under the influence of increased policy risks,and the new trend of real estate industry development.Guided by the strategic choices of the Evergrande Group's superior resources.After the large-scale layout diversification of Evergrande Group,the Group as a whole faced diversified development liquidity risks such as deterioration of liquidity indicators,slowing of total cash growth,rapid increase in investment demand and deterioration of debt maturity structure;short-term bank borrowings Financing risks such as internal violence,withdrawal of permanent capital instruments,limited seniority bills and limited corporate financing capacity;frequent occurrence of business crisis events,cross-capital market operations,rising risk of holding available-for-sale financial assets and rising exchange rate risk of holding foreign exchange assets And other business risks.Combined with the background analysis of the diversified development of Evergrande Group,the main reason for Evergrande Group to generate diversified development liquidity risk is the rapid expansion of debt-driven real estate business,the rapid deployment of multiple industries in the short term and the slow growth of new layout industry performance.The main reason for the diversified development financing risk of Evergrande Group is that it will continue to be deeply integrated in the future.The increase in investment demand of other industries will be transmitted to the financing end,the diversified financing channel pattern will not be formed,and the cross-capital market operation will complicate the financing risk.The main reasons for Evergrande Group's diversified development of business risks are a large number of unrelated diversified industrial layouts,which have led to increased operational uncertainty,and the lack of long-term planning and strategic and professional talent reserves for the diversified industrial layout of Evergrande Group.In order to reduce the financial risks in the diversified development of Evergrande Group,Evergrande Group should reduce its enterprises from the aspects of actively improving corporate responsibility and liquidity indicators,establishing a comprehensive coverage of liquidity risk supervision mechanism and establishing multi-level liquidity risk emergency plan.Diversified development of liquidity risk;from the expansion of financing channels,the full use of sub-group financing capabilities and the attempt to introduce strategic investors to upgrade the financing capacity of enterprises to cope with the financing risks arising from the diversified development process;We will develop a long-term strategic plan for the diversified development of Evergrande Group in response to risks,key investment in promising industries,and strengthening of specialized talent pools.The in-depth and meticulous risks arising from the two aspects of risk identification and cause analysis of the financial risks arising from the diversified development of Evergrande Group contributed to further understanding of the financial risks of diversified development of real estate enterprises and enriched the relevant real estate enterprises.Diversified development of financial risk research.The proposed systemic response plan for the diversified development of financial risk of Evergrande Group has certain practical reference for other real estate enterprises to cope with financial risks in the process of diversified development.