Case Study On Bond Default Of Tieniu Group

In recent years,the default risk in the bond market has continued to rise,and the number of default events has increased significantly.In the composition of the national economy,the automobile industry is indispensable,and its sound development is of great significance to the improvement of the country’s comprehensive competitiveness and the improvement of national living standards.The number of auto companies that have defaulted on the bond market has increased in recent years.Tieniu Group is a private automobile manufacturing enterprise.It has both the production of auto parts and the core business of vehicle manufacturing,which is handled by Zotye Auto,the most important subsidiary of the group.However,in 2020,the existing bonds "18Tieniu 01" and "18 Tieniu 02" defaulted at the same time.Under the background of the new economic normal and the transformation of the automobile industry,many car companies will face greater survival pressure,and iron and steel There is also a relationship between Niu Group and its subsidiary Zotye Auto to a certain extent.Based on this,this paper chooses to conduct case analysis on the bond default events of Tieniu Group.This article first introduces the basic situation of Tieniu Group,the specific relationship with Zotye Auto,the issuance of bonds and the occurrence process of default events,and further analyze the factors causing the default of Tieniu Group’s bonds,the study found that: the macroeconomic downturn makes the group’s profit space relatively narrow;the supply-side structural reform also has a greater impact on Tieniu Group,which has backward technology and lacks competitiveness;some policy changes in the auto industry have also restricted the auto business of Tieniu Group.From the perspective of internal operation,weak technology accumulation and lack of corresponding competitiveness of products have resulted in a decline in operating performance;the low level of debt management and the unreasonable debt structure further exacerbate the debt burden;weak internal control also had a negative impact on the operation of the entire group.From the financial point of view,it is found that the solvency of the group is insufficient;through a comprehensive analysis of the financial report of the core subsidiary Zotye Auto and the group’s financial report,it is found that the group has the characteristics of strong children and weak mothers;the group default risk is also analyzed using the Z-Score model.Finally,starting from different subjects,put forward corresponding suggestions to prevent bond defaults: the first is that bond-issuing companies in the automotive industry should attach importance to technological innovation and improve their core competitiveness;all enterprises should focus on optimizing the capital structure,adopt a variety of financing methods,and pay attention to maintaining an appropriate longterm and short-term financing structure.The second is that rating agencies should strictly abide by the establishment principle of institutional independence,do a good job in external supervision of the market,and strengthen the protection of investors;the rating method is upgraded according to market changes,and can be selected according to the rating object when selecting consolidated statements and parent company statements.The third is that investors should learn more about finance and financial management,diversify their investments as much as possible,do a good job in risk tracking,and pay close attention to the public information of investment objects.