A Case Study On The Failure Of Diversified Operations Of Listed Agricultural Companies

Agriculture is the foundation of our national economy and plays an important role in our economic development.In the No.1 document of the Central Committee of the Communist Party of China in the past decade,the state has repeatedly mentioned the issue of agriculture and promoted the Rural Revitalization to the national strategy.As the "leader" of agricultural industry,agricultural listed companies play a leading role in the stable development of China's agricultural economy.In the context of industrial upgrading,due to the weakness of the agricultural industry and the emergence of new industries,many agricultural listed companies began to carry out diversified operation.However,some agricultural enterprises had problems in the process of diversified operation,which had a negative impact on the enterprise operation.Chuying Agro-Pastoral is a typical representative.As an agricultural listed company that has implemented diversified management strategy,its business covers pig breeding,Internet and financial investment.However,due to its overload expansion and unreasonable resource allocation,the business performance of the enterprise has declined and the main business has lost competitiveness,which ultimately leads to the failure of diversified operation and the enterprise has been in serious financial difficulties.Based on the financial data from 2010 to 2018,this paper studies the failure of diversified operation of Chuying Agro-Pastoral.First of all,based on the related theories of diversification,this paper analyzes the diversification of 41 agricultural listed companies in China.Secondly,according to the theory of agricultural comparative interest and the theory of risk dispersion,this paper analyzes the development process and motivation of the diversified operation of Chuying Agro-Pastoral.On this basis,it analyzes the failure performance of the diversified operation of Chuying Agro-Pastoral from two aspects of financial performance and market performance.In the end,the reasons for the failure of the diversification of agriculture and animal husbandry of Chuying Agro-Pastoral are explored.It is found that the failure of the diversification of Chuying Agro-Pastoral is caused by many factors,but mainly by internal factors.First,the corporate governance structure is unbalanced,and there is no check and balance mechanism for managers.In the case of managers' overconfidence,it leads to irrational diversification investment of enterprises.The second is the rapid expansion of the company in the process of diversification,ignoring the development of the core business,the diversification business failed to produce synergies.the third is that the expansion of diversification leads to the imbalance of the corporate financing structure,the aggravation of the debt burden,and under the deterioration of the external environment,the capital chain is broken.Finally,the lack of professional management talents in the diversification field.Through the research on the failure of the diversified operation of Chuying Agro-Pastoral,this paper provides a case reference for other enterprises in the agricultural industry,so as to promote the sound development of agricultural enterprises in China,accelerate the upgrading and transformation of the agricultural industry,and realize the revitalization of the country's countryside.