| In order to solve the shortage of funds for infrastructure and public services provided by governments in China and boost domestic economic,the Chinese government began to vigorously startup the PPP projects in 2014,encouraging private capital to invest in infrastructure projects,and the government’s stimulus policies attracted generous capital into the PPP industry.As of 2018,China has become the world’s largest PPP market.With the rapid development of PPP model in China,it has also exposed some outstanding problems,such as unreasonable risk distribution,emphasis on construction rather than operation,imperfect performance evaluation,and excessive leverage of social capital financing.In 2017,the government began to issue regulatory policies to standardizing industry development.A large number of non-compliant PPP projects were cleared out of the library,and the financial deleveraging process was started to hedge risks.The regulation policy on PPP and monetary tightening led to the debt crisis of the enterprises that had developed large-scale PPP projects.Therefore,the debt risk faced by enterprises when they invest in PPP projects has become the focus of attention.Based on the analysis of the operation environment of PPP project,this paper points out that the development of PPP project in China is not standardized,and it is faced with some constraints such as imperfect system and law,poor financing environment of PPP project,lack of contractual spirit of all parties concerned,and unreasonable risk sharing of PPP project.Through the analysis of the development strategy of Orijin Water Corporation,the paper points out that the mode of promoting the high-speed development of business income through PPP project is not sustainable,and makes the company face huge debt financing pressure.According to the analysis results of the company’s financial data from 2014 to 2018,it is pointed out that the company has problems such as deteriorating asset quality,capital structure imbalance,declining profitability,and insufficient cash flow.In view of its own debt risk,Orijin Water Corporation has taken a series of self rescue measures.This paper analyzes its effectiveness and points out that in order to completely improve its financial situation,the company needs to improve from the following aspects: reducing the company’s debt level through the transformation to the asset-light model;improving the operating capacity of PPP project to improve the company’s profit quality;improving the financing capacity and financing structure to relieve the company’s debt repayment pressure;improving the company’s cash flow and improving the company’s financial security through focusing on the development of membrane technology business.In view of the high operational risk caused by the institutional defects of PPP mode,the government should constantly improve the institutional environment of PPP mode.The possible innovation of this paper lies in: under the background that the development of PPP model in China is not standardized and the financing channels of private enterprises are narrow,the restriction of financing environment and high operational risk of PPP project should be fully considered in the development of social capital,and the relevant enterprises should not pay too much attention to the growth of business income brought by PPP project,but should pay attention to the quality of PPP projects,through the development of PPP projects to enhance the company’s competitive advantage and improve the company’s financial situation,so as to realize the long-term sound development. |
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