A Case Study Of Hna Group’s Overinvestment

With the continuous expansion of the scale of domestic investment in China,more and more enterprises choose the way of investment and merger to expand the scale of enterprises,expecting to use this way to enhance the strength of enterprises,so that a firm foothold in the industry.However,the enterprise’s investment and merger will have an impact on the development of the enterprise is not known.In addition,is there a limit to the scale of enterprise expansion? What problems will arise when the scale is beyond this limit? That is why more and more scholars study overinvestment,and their research focuses mainly on the real estate industry and the energy industry,with relatively few studies on the air transportation industry.Therefore,this paper,based on the related theories of overinvestment,draws on the existing research results and methods at home and abroad,and based on China’s system and economic environment,selects HNA Group,an air transport enterprise with frequent investment and merger activities,as the object of study to have a deep understanding of its expansion events.First of all,the background of the air transport industry and the general situation of HNA Group are described to understand the expansion process of HNA Group over the years.The investment of HNA Group is measured with financial indicators and the Hankel and Levant model to demonstrate that there is indeed excessive investment.Using the financial index analysis method to hna group,the investment performance of investment after the analysis,using the Z-Score financial risk early warning model to evaluate the financial risk of the hna group,finally draw the conclusion: hna’s excessive investment behavior for the enterprise the management has brought bad influence,poor investment performance,liquidity into the financial crisis,unable to repay debts in bankruptcy reorganization in the end.Based on the above analysis of HNA Group’s investment background,investment process,measurement of overinvestment and its impact,this paper explores the motivation of overinvestment,explains it from two aspects of external factors and internal factors,and finally puts forward suggestions for the future development of HNA Group and gives a warning to other enterprises.The case analysis of HNA Group’s overinvestment not only broadens the perspective of overinvestment research,but also provides some reference significance for the future investment of air transportation industry enterprises and other enterprises.