Over-Investment Case Study Based On *ST Protruly Vision Technology Group

The investment behavior of enterprises is an important foundation to form a reasonable capital structure,and it is an important factor to determine the sustainable and healthy development of enterprises.Investment decision not only affects the operation and production of enterprises,the effective allocation of resources and financial decision-making,but also related to the business performance,profitability and development prospects of enterprises.Because the decision-making process is affected by multiple factors,investment decision-making behavior is not always the goal of maximizing enterprise value,managers will tend to seek private income and expand the scale of enterprises,and then appear "excessive investment" problem,causing serious damage to the value of the company,hindering the long-term stable development of enterprises.This paper selects *ST Protruly Vision Technology Group as the research object.*ST Protruly Vision Technology Group as a leader in the electronic video industry,in the traditional electronic video industry in the country to introduce a large number of policies to encourage the intelligent hardware industry,2015 *ST Protruly Vision Technology Group of backdoor listing,began to launch a new business model around intelligent hardware,based on the original video business sector,Start laying out the ecosystem of smart hardware.Use the capital platform to make large-scale financing and use the funds financed for large-scale investment expansion.The size of assets grew by about 12 times times in 2013-2016,with foreign investment growing 196 times times and expanding at such a rapid scale in just four years.And blind expansion so that investment projects did not form a profit and large impairment,a large number of short-term rigid debt expired,and finally in 2017*ST Protruly Vision Technology Group of financial crisis,resulting in a broken capital chain,production and operation stagnation,the stock price cliff fell.On the basis of the previous research,combined with the example of *ST Protruly Vision Technology Group excessive investment,this paper analyzes and identifies the investment behavior of *ST Protruly Vision Technology Group in recent years based on the angle of financing scale,cash flow angle and Richardson model,and determines the existence of excessive investment behavior.This article mainly from two aspects of the case of Overinvestment Analysis:(1)*ST Protruly Vision Technology Group of excessive investment reasons.Because the state strongly supports the development of intelligent hardware in recent years to drive the investment craze of intelligent hardware,the unreasonable ownership structure makes the decision of major shareholders lack of checks and balances,the board’s power is too large,the foreign investment decision-making process is not perfect,the management is overconfident,and the multiple high premium acquisitions are ultimately caused by the completion of the listing performance commitment*ST Protruly Vision Technology Group of excessive investment behavior.(2)Analysis of the consequences of *ST Protruly Vision Technology Group of excessive investment.Combining with the specific situation and financial information of *ST,this paper analyzes the consequences of excessive investment from three aspects,such as the deterioration of production and operation,the increase of financial risk and the damage of social reputation.Finally,the paper puts forward some suggestions to restrain *ST Protruly Vision Technology Group ’s excessive investment,including: Optimizing the ownership structure,preventing the investment decision of "one word",perfecting the internal control mechanism,strengthening the internal supervision function,introducing creditors as supervisors,giving full play to the external supervision function,strengthening the core main business,improving the core competitiveness,paying attention to the rational evaluation of investment projects,Prevent non-efficient investment,improve the information disclosure system,improve the transparency of corporate information.Enterprises should make reasonable judgments according to their actual ability,especially cash flow,before investing,and have some warning to enterprises with excessive investment tendency.