Case Study On Bond Default Of Lifan Corporation

China’s bond market started late and has been developing smoothly since its formation,and no bond default has ever occurred before 2014,mainly because for a long time,China’s bond market has maintained rigid payments,and state-owned enterprises will also have implicit government guarantees behind them,so the bond market has been trusted by investors.In 2014,the first defaulted public bond in China’s bond market appeared for the first time-"11 Chaori Bond",which broke the rigid payment and changed China’s bond default from the traditional government guarantee to market-based disposal,since then,the scale and number of bond defaults with the number of substantial growth,to today’s corporate bond defaults have tended to normalize.after the outbreak of the new crown epidemic at the end of 2019,economic development almost stagnated,but also increased a lot of bond defaults,private enterprises have the largest number of bond defaults,the largest amount,at the same time,the automotive industry as a strategic and pillar industry of the Chinese economy,in 2020,a total of four automotive companies that have defaulted on bonds With the development of new energy industry,the auto industry is facing the stage of industrial restructuring and transformation to new energy,there is a general problem that the competitiveness of independent brands is not strong,the risk of default of auto companies is gradually exposed,the probability of default is gradually increasing,and the market also focuses its attention on the auto industry.In this context,the problems encountered by Lifan in the process of transitioning from traditional to new energy vehicle enterprises are typical and can also represent the current development status of Chinese vehicle enterprises.In view of this,this paper selects Lifan Co.,Ltd.as the research object,identifies the trajectory of Lifan’s bond defaults by analyzing the causes of the company’s bond defaults,finds out the problems in the company’s governance and operation,and on this basis,further analyzes the roles of the company,external regulators,government and other bond market players in bond default risk prevention.On this basis,this paper analyzes the current situation of bond defaults in China and puts forward corresponding countermeasures and suggestions for the prevention of bond default risks in China.This paper adopts case study method,literature research method and qualitative and quantitative analysis to research,after sorting out the bond default of Lifan shares,from the company’s internal causes,external causes and internal and external causes together,three aspects,to analyze the bond default of issuing Lifan shares is not only caused by macroeconomic downturn,but also affected by industry development factors,from internal causes,Lifan shares’ Strategic planning is unreasonable,lack of core technology and independent innovation,high debt leverage triggered financial difficulties,plus the instability of management,all accelerated the process of bond default.The analysis concludes that: first,strong profitability and sustainability are necessary to resolve the risk;second,Enterprises should make reasonable decisions and scientific transformation in the development process;and third,the credit rating system needs to be further improved.