Research On Financial Risk Management Of Equity Pledge Of Qumei Home Furnishing Company

At present,with the rapid development of China’s capital market,market participants are constantly seeking diversified financing approaches.Shareholders of listed companies often pledge their equity to financial institutions as high-quality assets to obtain dynamic funds because of their static stability and value transparency.Equity pledge financing is easily accepted by shareholders and financial institutions because of its advantages of easy transfer,easy investment and less restrictions.However,the development of market economy is not mature,the relevant legislation needs to be improved,and there are many risks hidden behind equity pledge financing.At the same time,domestic listed companies are widespread phenomenon of equity structure simplification,the controlling shareholder stake than other shareholders,even within the company has the absolute power and control,its shareholders’personal behavior will inevitably cause certain influence to enterprise management,the controlling shareholder equity pledge behavior and the financial risk of listed companies there are inseparable.At present academia for equity research direction mainly includes the enterprise market value,corporate performance,earnings management,etc.,few researchers to the controlling shareholder equity pledge as the breakthrough point to the listed company’s financial risk and management by an in-depth study,but the company controlling shareholder’s personal behavior directly affects the enterprise operation and management condition and with financial risk,Therefore,it is of great significance to study the controlling shareholder’s equity pledge for the management of enterprise financial risk..The research object of this paper is Qumei Home Furnishing Group Co.,LTD.（referred to as Qumei Home furnishing）,whose controlling shareholder has frequently pledged a high proportion of equity since 2018,and has received risk reminders from CSRC for many times.Therefore,it has high research value as a case study of the impact of equity pledge on financial risk.This paper firstly sorts out relevant literature,summarizes and analyzes domestic and foreign research viewpoints,and introduces concepts such as equity pledge,financial risk and corporate governance.Secondly,the case study method is used to study the financial risk management of equity pledge of Qumei Home,focusing on the influence path of holding East’s equity pledge on corporate financial risk,and the motivation of equity pledge and the characteristics of equity pledge process are comprehensively described and analyzed.Then the financial index analysis method is used to identify the financial risk of the case enterprise combined with relevant financial data.Using the z-value and F-value model measurement results to make a comprehensive evaluation of the company’s financial risk,and put forward the qumei Home in the financial risk management activities of the existing problems:first,the corporate governance structure is not reasonable;Second,the risk early warning mechanism is weak;Third,the internal control system is not perfect.Based on the above analysis,the enlightenment of equity pledge experience and corresponding financial risk management suggestions are obtained.Through the case study and analysis of Qumei Home furnishing,we hope to help enterprises improve their corporate governance structure and internal control mechanism,build a full-equity pledge risk warning system,and finally build a sound financial risk management system.