Financial Risk And Control Of Diversification In Real Estate Industry

As the economic market of our country is becoming more and more mature and the competition is becoming more and more fierce,many enterprises have adopted the diversified management mode to disperse the management risk and seek more economic benefits.Although many enterprises have strengthened their economic strength through diversification,many enterprises have fallen into financial difficulties because of diversification,Zhonghong Stocks belong to the latter.Since its listing in 2010,Zhonghong Stocks has been carrying out a diversified strategy,actively advancing into the cultural tourism industry,trying to transform itself into a "cultural tourism + real estate" dual-business enterprise,during which it also dabbled in the fund,mining and other industries,but in 2018,zhonghong Stocks were forcibly delisted because their share prices were below their closing prices for 20 consecutive days.It became the first non-ST company on the securities market to be forcibly delisted.Obviously,diversification has not brought more economic benefits to Zhonghong Stocks,instead,it has left Zhonghong Stocks stuck in the mud,unable to escape.Therefore,it is of practical significance to explore the financial risks and control problems under the diversified operation of Zhonghong Stocks,which can help the diversified real estate enterprises to improve their risk control ability.Based on the study of the theories and literatures related to diversification and financial risk,this paper analyzes the financial risk of diversification in real estate industry against the background of the characteristics of real estate industry and the necessity of diversification,this is to pave the way for the case study of Zhonghong Stocks.First of all,it analyzes and sorts out the motivation,development process and management status of Zhonghong Stocks diversification;then it makes a preliminary identification of the financial risks of Zhonghong Stocks in its investment,fund-raising and business activities,and then proceeds from the overall level,this paper uses factor analysis method to judge the financial risk degree of Zhonghong Stocks in each year,and finds out the risk factors that affect Zhonghong Stocks,so as to pave the way for the risk causes and control countermeasures,unreasonable capital structure has led to financial leverage imbalance of Zhonghong Stocks,imprudent investment decisions have led to a weakening of the profitability of Zhonghong Stocks,and insufficientworking capital has led to poor liquidity of Zhonghong Stocks,based on these reasons,this paper puts forward the control countermeasures of Zhonghong Stocks from the aspects of Investment,fund raising and management.Through the analysis and study of the full text,this paper draws the following two conclusions: Firstly,the mismatch of diversified industry portfolios and excessive investment in the company are the main reasons for financial risks arising from Zhonghong Stocks;secondly,diversified investment in the real estate industry should give priority to related industries,and at the same time select the cultural tourism-real estate industry carefully;Thirdly,reasonable risk control is the key to ensure the diversification of real estate enterprises.