Research On The Financial Risks Of Baofeng Group Under Its Transformation From Light Assets To Heavy Asset

In recent years,the trend of China’s economic development has shifted from high-speed growth to high-quality development.Enterprise development should also follow the trend of the times and actively shift towards the pursuit of high-quality and cost-effective growth.From a certain perspective,light asset operation is more in line with the current policy requirements of "high-quality development".In reality,enterprises generally prefer the light asset operation model.In addition to being "light asset" enterprises themselves,many "heavy asset" enterprises in China have been "light" moving forward.Storm Group was originally a light asset enterprise in the internet video industry,but after going public,it vigorously developed its sales of hardware products business.Its proportion of heavy assets in total assets gradually increased,gradually transitioning from light to heavy assets.However,during the period of light to heavy,its operating and financial situation sharply declined.Therefore,this article takes Storm Group as the case study object,describes the research background and significance,and after organizing and commenting on relevant literature at home and abroad,raises the question of whether the transformation of Storm from light to heavy assets has affected its own financial risk intensification.Then this article defines the light asset and light asset operation models,heavy asset and heavy asset operation models,and financial risks.It introduces the business model theory,capital structure theory,and financial risk management theory to prepare for the subsequent analysis.Then this article introduces the transformation process of Storm Group and Storm Group from light to heavy assets,and analyzes the "light to heavy" changes in the asset operation mode of Storm Group during the transformation process.After analysis and preparation,this article conducts a systematic study on the financial risks of Storm Group during the transition from light to heavy assets based on financial risk management theory.Firstly,the corresponding risks of Storm Group from light to heavy operations,profitability,fundraising,and fund chain during the period are identified.Then,the Y-score early warning model is used to quantitatively evaluate the financial risks.Finally,the causes are analyzed and summarized,and prevention suggestions are proposed.After research and analysis,this article believes that after the listing of Storm Group,the business core gradually shifted to the Internet TV business that sells goods.However,due to the lack of in-depth research and development of core technology,Storm TV’s competitiveness in the industry is inferior to its competitors,resulting in a decrease in Storm’s operating capacity.The sales strategy of low price profit sharing and the severe shrinkage of its light asset business,Storm Video,have made it unprofitable and have suffered losses for three consecutive years.Storm Group’s own hematopoietic capacity has been severely weakened,leading to a huge demand for financing.However,its poor debt repayment ability has made it difficult for Storm to raise funds again,further exacerbating the risk of the storm’s funding chain breaking.Due to the failure of competition in the internet video industry,Storm Group had to transform from light to heavy assets.However,the dominance of Storm Group’s corporate governance made Storm Group’s transformation from light to heavy assets somewhat urgent,resulting in an excessive investment strategy.In addition,Storm Group’s narrow financing channels and imperfect financial risk management system ultimately led to an increasing financial risk and deteriorating financial situation,leading to its delisting.I hope the financial risk case analysis of Storm Group can provide inspiration to other enterprises in the industry.