Motivation And Effect Analysis Of Assets-backed Notes Financing Of Accounts Receivable In Construction Industry

The construction industry occupies a major position in China’s economic system.At the beginning of this century,China’s construction industry grew rapidly and steadily.However,with the decline of the macro economy,the growth rate of the construction industry has been downgraded,and some problems in the industry have gradually emerged.Accounts receivables are one of them.Under the market-oriented mechanism,the buyer occupies an active position,and credit sales have become a mode of construction owner’s flow transaction.In addition,the transaction amount is often huge,and the receivables posted by construction companies are generally large.However,most construction companies focus on front-end construction projects and ignore accounts receivable management,resulting in a large number of accounts receivable of construction companies stagnation.On the other hand,affected by the business model,the capital requirements of construction enterprises are extremely large.Therefore,the distress of accounts receivable of construction enterprises and the pressure of capital demand have forced them to increase external financing,which has further deteriorated the financial situation of construction enterprises,and the financial leverage has continued to approach the red line,which has seriously hindered the company’s development.In order to provide solutions for construction enterprises to resolve the dilemma of receivables,after careful analysis of the various resolution methods,this paper sets the research direction as receivables asset-backed bill financing business,and chooses China Construction Third Bureau Group Co.,Ltd.("China Construction Third Bureau")as a case study.Headquartered in Wuhan,Hubei Province,China Construction Third Bureau is a representative construction enterprise with good asset-backed bill business.At present,the China Construction Third Bureau is seriously affected by the new crown epidemic,and researching it is also of epochal significance.This article analyzes the motivation and effectiveness of asset-backed bill financing of accounts receivables of the China Construction Third Bureau in order to help construction companies resolve their difficulties in receivables and make financing decisions.Firstly,this paper introduces the theoretical basis of asset-backed notes,then combs the relevant literature,and clarifies the necessity of implementing asset securitization of accounts receivable in the construction industry,and makes an in-depth analysis with the Third Bureau of China Construction Engineering Corporation as an example,finally comes to the conclusion that "Accounts receivable asset-backed bill is an effective way to solve the current predicament of the construction industry","the construction industry asset-backed bill market still needs to be improved" and "the construction enterprise asset-backed bill business still needs to return to the root" are three conclusions applicable to the whole construction industry,and four suggestions are put forward.Among them,the third chapter "the difficulties,risks and solutions of receivables in construction industry" is one of the important chapters of this paper.Starting from the current difficulties and risks of receivables in construction industry,it concludes that asset securitization is an effective way to solve the above problems,which lays a solid foundation for the case analysis below.The fifth chapter "analysis of ABN Financing Motivation of China Construction Third Engineering Bureau" and the sixth chapter "analysis of ABN financing effectiveness of China Construction Third Engineering Bureau" are the focus of this paper.The fifth chapter analyzes the motivation of asset-backed notes business of China Construction Third Engineering Bureau comprehensively and systematically from the internal and external aspects,including financial factors and operational factors;the sixth chapter analyzes the effectiveness of asset-backed notes business of China Construction Third Engineering Bureau objectively and deeply according to the five elements of asset-backed notes business,the final Issuance results and financial impact.The above two chapters cover the starting point,process and end point of asset-backed note business.Compared with other researches in this field,they can carry out a more complete analysis of asset-backed note business,which is the focus of this paper.