Analysis On Financing Effect Of Xincheng Holdings REITs

In recent years,our government has clearly defined the general tone of " Houses are for living in and not for speculative investment" and strictly controlled the sales and financing of real estate companies.At the same time,the government has targeted the goal of "stabilizing housing price,land price and expectation",which means that the future regulation policies on real estate are easy to tighten but hard to loosen.That is to say real estate enterprises are under great pressure.Under the heated competition,real estate enterprises need to expand the financing channels.Real estate investment trusts is a good choice for financing innovation of Chinese real estate enterprises.This article takes Xincheng Holdings' REITs as an example.The event analysis method,financial indicator method,DEA and Malmquist index are used to analyze the impact of REITs on enterprises.The conclusions of this article are as follows:Firstly,REITs can increase shareholder wealth.The results of the event analysis method show that after the issuance of REITs,Xincheng Holdings' share realized a cumulative excess return of 6.68%.This shows that Xincheng Holdings' REITs has been recognized by the market and has increased shareholder wealth.Secondly,REITs can improve financial performance.The results of financial index analysis show that: :(1)REITs can speed up the capital turnover of enterprises.After issuing REITs,the liquidity ratio and cash ratio of Xincheng Holdings are improved.(2)REITs can revitalize the company's assets.After the financing innovation,inventory turnover,current asset turnover and total asset turnover of Xincheng Holdings have been improved.(3)REITs can improve the profitability of enterprises and improve the return on equity and net profit on sales after financing.(4)REITs can enhance corporate growth capabilities,the growth rate of income and total profit after financing has increased after the issuance of REITs.Thirdly,REITs can improve production efficiency.The results of DEA-BCC model show that after Xincheng holdings issued the REITs,the comprehensive efficiency of the enterprise increased from 0.375 to 0.912,which was effective in 2018,indicating that the REITs can improve the comprehensive efficiency of the enterprise.The results of DEA-Malmquist model show that REITs is the main reason for the improvement of TFP of Xincheng holdings.According to the conclusion of this study,the paper puts forward suggestions to the government,real estate enterprises and investors.Real estate enterprises should rationally use REITs for financing based on the actual conditions.The government needs to improve the top-level design: improve laws and regulations system,promulgate special laws and regulations on REITs;improve the tax system,and formulate appropriate tax preferential policies.Investors need to treat REITs rationally and choose REITs that is suitable for them in order to earn income.