Research On Financial Risk And Economic Consequences Of Diversification Strategy Of Real Estate Enterprises

In recent years,the degree of diversification of China's listed companies has shown an overall upward trend.Enterprises are pursuing a diversified business model,trying to reduce the business risks of enterprises based on the theory of "can't put eggs in the same basket",so as to achieve rapid expansion.But can companies really achieve steady development through diversification strategies? Practice has proved that diversification is a double-edged sword,which can both diversify business risks and bring great financial risks.Yunnan Metropolitan Construction Investment Company is a large provincial enterprise supervised by the Yunnan State-owned Assets Supervision and Administration Commission.In 2007,Yunnan Metropolitan Construction Investment Company borrowed from ST Honghe and landed on the capital market.It was the first real estate listed company in Yunnan Province,and was once sought after by the capital market as a "land-level Develop the first share." In recent years,Yunnan Urban Investment has rapidly expanded its assets and scale through diversified strategic investments and operations,but relies on a debt-driven growth model,off-site mergers and acquisitions,cross-border investment,slightly "miserable" operating results,frequent equity transactions and large debts pushed the former Yunnan Metropolitan Construction Investment Company's real estate stars to the forefront.This paper selects Yunnan Metropolitan Construction Investment Company as the research object of corporate diversification strategy.Based on the research of A great deal of literature,it analyzes the financial situation of Yunnan Metropolitan Construction Investment Company and The financial risks faced in the process of diversification,and then by analyzing the economic consequences of financial risks to Yunnan Metropolitan Construction Investment Company,the reasons leading to its financial risks are summarized.The study found that Yunnan Metropolitan Construction Investment Company 's lack of profitability and inadequate endogenous financing made the company itself not equipped with perfect conditions for its diversified expansion.Thus,a series of diversified layouts further even exacerbated the total funding shortage and cannot matched capital allocation of Yunnan Metropolitan Construction Investment Company.The result is today's financial woes.Aiming at the causes of financial risks of Yunnan Metropolitan Construction Investment Company under a diversification strategy,this article puts forward a series of measures and suggestions.Finally,this article summarizes the research conclusions of the case of Yunnan Metropolitan Construction Investment Company and proposes further consideration of the research in order to provide a certain reference for the strategic layout of enterprises similar to Yunnan Metropolitan Construction Investment Company.