Research On Financial Risk Identification And Control Of HYZB Under Diversification Strategy

The real estate industry has been considered a “profiteering” industry in the past,but now the real estate industry has gradually entered the “Platinum Era” from the “Golden Age”.Since 2010,the state has continuously stepped up the macro-control of the real estate industry,from the “National Ten” and “National Eleven” in 2010 to the most stringent new policy in 2016,and now the real estate has completely entered the “five limits"era.The Politburo meeting on July 30,2019 reaffirmed the positioning of real estate in 2016.What followed was real estate tax reform,changes in loan interest rates,and rising land transaction prices.Despite the tightening of macroeconomic regulation and control,the number of enterprises entering the real estate industry has been increasing,and the quality of the enterprises entering the market has become higher,leading to more intense competition.At the same time,the boom in mergers and acquisitions has also led to an increase in industry concentration,and the pressure for survival of small and medium-sized real estate has continued to increase.In order to find a living space,a large number of real estate companies choose to implement a diversification strategy.In China,companies such as Vanke and Wanda have implemented diversification strategies to further enhance their corporate value.However,more companies have entered various crises after implementing the diversification strategy.Especially for small and medium.sized enterprises,whether the diversification strategy is really suitable,and if there are any risks,how to control them.In the study of diversification strategies,most scholars have adopted empirical research methods,but few case studies.In this few case studies,the research objects are also concentrated in Vanke,Wanda and other giant real estate companies.The resources owned by these real estate leading enterprises are completely different.This case will be a favorable supplement to the previous case studies,and choose a small and medium-sized real estate enterprise of HYZB as the research object.This paper firstly sorts out and summarizes the relevant domestic and foreign literatures of the diversification strategy and the related theories of diversification motivation and risk,and then conducts case analysis on the basis of this.The case part mainly analyzes the industry environment,investment activities,fundraising activities and business activities in which HYZB is located,and identifies the risks it faces under the diversification strategy.For HYZB,the risks are mainly blind investment risk,corporate governance risk,debt repayment risk and main business damage risk.In response to these risks,this paper proposes corresponding risk control strategies in combination with the macro environment.In response to blind investment risks,companies focus on investment feasibility analysis and the selection of appropriate diversification types and rhythms.For corporate governancerisks,HYZB should raise the awareness of equity change risks,strengthen the control of related party transactions,and control the stock pledge rate.In the face of debt repayment risk,HYZB should establish a sound financial budget and internal control system for preand post-in-process control as well as a complete response and disposal mechanism.For the risk of damage to the main business,HYZB should cultivate its core competitiveness according to its own advantages,find a breakthrough point,and continue to develop the main business.At the same time,divestiture of non-performing assets,optimize resource allocation,and adjust business portfolio.Other small and medium.sized real estate companies can also choose their own development strategy and establish a corresponding risk control system based on their own situation.