Case Study Of Debt Default Of Sunshine City Group

With the continuous expansion of China’s capital market,enterprises have leveraged the capital market to accelerate their scale expansion,and the impact of the new crown epidemic has increased the risk of corporate debt and the frequent occurrence of defaults in the bond market.In recent years,in the international situation tends to be complicated,since the beginning of the outbreak of the new crown epidemic to 2022 domestic epidemic is still more epidemic distribution,the economic cycle downward background,the bond market state-owned enterprises default situation has eased,but the debt risk of private enterprises is still large.The defaulted enterprise industry is concentrated in the real estate industry,the change of market environment inhibits the previous "wild growth" state of real estate enterprises,the impact of regulatory policies and the weak industry boom,sales downward,a large number of debt maturity in the short term,excessive reliance on external financing and other factors lead to accelerated exposure of debt risk of real estate enterprises,the risk of some For some real estate enterprises with little awareness of risk prevention and insufficient risk resilience,debt crises and even capital chain breakdowns occur from time to time.Therefore,it is important to study the debt defaults of real estate enterprises based on the early warning perspective and the severe and complex market environment.The paper selects a representative case of debt default,Sunshine City Group,as a research case.Based on the perspective of financial early warning and supported by the theory of preferential financing,the theory of financial distress and the theory of financial risk management,the paper compares the process of debt default of Sunshine City Group and analyzes the causes of debt default of Sunshine City Group.The financial situation of Sunshine City before default is analyzed through financial statements,and the entropy power method and the improved efficacy coefficient method are applied to construct a financial early warning model,which makes the degree of early warning more objective.The early warning results show that Sunshine City has the problems of weak profitability,poor asset quality and insufficient debt servicing ability,and further analyzes the causes of debt default from the market environment,financial level and internal operation and management level.The study found that at the market environment level,the tightening of industry policies and the impact of the epidemic led to the debt default of Sunshine City Group,while at the internal level,the debt default was mainly due to high financing costs,low operational efficiency,poor operational decisions and poor internal governance,etc.The risk of debt default of Sunshine City Group was exposed through its unreasonable financial data long before the default occurred.Based on the conclusion of the causes of Sunshine City Group’s debt default,the paper summarizes the relevant revelations of Sunshine City Group’s debt default and puts forward suggestions for Sunshine City Group’s debt default response.