Case Study On Credit Rating Of State-owned Construction Companies From An International Perspective

As one of the pillar industries of national economy of China,construction and engineering industry is closely related to national economic development and social life security.The project level performance failure and company level operation failure of construction and engineering companies have a negative impact on the production and living of residents,because of the spillover effect caused by quality,safety and other risks,as well as the extension of construction period.In this regard,it is necessary to adopt an appropriate methodological framework to evaluate the performance and operation ability of construction and engineering companies,and discuss the operation and management of companies,based on the evaluation and analysis process while evaluating the default risk.This paper focuses on the credit evaluation of fulfilling financial commitments.Based on the methodological analysis framework of S&P Global Ratings,this paper analyzes the practice of credit rating and the generation process of evaluation results of a state-owned construction and engineering company,and further discusses the operation and development,as well as the financial credit evaluation of construction and engineering companies based on the analysis process.Through the literature review on the credit evaluation of construction companies at home and abroad,this paper firstly discusses the problems existing in the current research,including the lack of attention to the credit in fulfilling the financial commitments,the neglect of the systematic and standardized analysis framework,and the lack of detailed analysis of practical cases combined with evaluation model.On this basis,this paper uses the research methods including text analysis and comparative analysis to sort out and compare the system framework,selection and interval measurement of evaluation indicators,organizational logic of indicators,etc.of the analysis methodologies of credit rating agencies that have been widely recognized in the international capital market,and selects the methodological analysis framework for industrial and commercial enterprise credit rating of S&P Global Ratings,which has advantages in the systematization of methodological organizational structure,integrity of methodological disclosure,and the reproducibility of the evaluating process,as the basis for subsequent analysis.Subsequently,this paper uses the research methods including the text research method and case study method to analyze the work process and work focus of international credit rating based on practical experience.Based on the methodology system of S&P Global Ratings,this paper evaluates the credit of a state-owned construction and engineering company to fulfill its financial commitments,combs the evaluating process,and verifying the case study through expert interviews and making comparative analysis with other comparable enterprises that have obtained credit rating results from S&P Global Ratings.Finally,using the method of expert interview,according to the credit rating analysis process and the application process of analysis methodology combined with examples,this paper focuses on the problems of high financial leverage,low profit margin and high market concentration,and further discusses the operation development and financial credit management of construction and engineering companies.Aiming at the problem of high financial leverage,this paper analyzes that the characteristics of capital driven lead to the dilemma of high financial leverage of construction and engineering industry,and discusses that the business liquidity of accounts receivable recovery and the financial liquidity of debt rolling renewal are the core factors that determine the ability of construction and engineering companies to fulfill their financial commitments.Aiming at the problem of low profit margin,this paper puts forward that operating cash flow is the basis for evaluating the financial risk of construction and engineering companies.Aiming at the problem of high market concentration,this paper proposes that appropriate diversification of regions,customers and business lines in line with the characteristics is more conducive to the business risk control of construction and engineering companies.On this basis,this paper further puts forward the operation strategy with business and financial rolling capacity as the core,as well as the development strategy based on enterprise history,resource layout and operation capacity.