| Bonds occupy a very important position in China’s financial market,and its market size is huge.Since 2014 the rigid payment of bonds in China has been gradually broken,and there have been numerous bond defaults,among which the number of defaults of state-owned enterprise bonds has also increased significantly since 2020.The credit risk of real estate enterprises,which commonly operate with high leverage,is also gradually revealed in the wave of defaults.Since the first material default of Zhonghong in 2018,a number of real estate companies have been involved in a wave of credit bond defaults one after another.By 2022,the number of bond defaults in the real estate industry was as high as 138,with the size of defaults reaching 147.08 billion yuan,with both the number of defaults and the amount of defaults constantly breaking new highs.On the one hand,real estate bond defaults will cause huge losses to investors,plunging the real estate market and bond market into a dangerous storm and hindering its healthy development;on the other hand,such bad signals will be quickly transmitted to the entire financial market,affecting financial institutions and other industries associated with the real estate industry.As problems in the real estate industry continue to be exposed,more real estate enterprises are expected to default in the future.Therefore,this paper selects Yango Group Co.,Ltd.,which has recently burst into flames,for study,with a view to providing lessons for future real estate enterprises and stakeholders.This article initially provides a brief overview of the Yango Group,its bonds,and the process of Yango Group’s bond default.Then,it examines the internal and external factors that contributed to Yango Group’s default,such as the macroenvironment,credit rating,epidemic factors,corporate governance,financial structure,corporate strategy,and business model,and analyzes the causes of Yango Group’s default.Finally,it assesses the risk of Yango Group’s debt default using the Z-score model and the KMV model.In order to support the long-term and steady growth of China’s real estate business,we wish to offer insightful recommendations for the healthy development of the entire sector.Lastly,the report offers suggestions to regulators,credit rating companies,and investors.The study found that,from the perspective of external reasons,policy regulation and control had a great impact on the real estate industry and the external financing environment of the whole market was also tightening significantly.In addition,it was also affected by the impact of the new crown epidemic and the lagging credit rating,which led to insufficient cash flow and a tight capital chain of the company and laid the groundwork for the subsequent default crisis.In terms of internal reasons,the core reasons that plunged Yango Group into the crisis were the company’s chaotic internal governance,aggressive expansion,unreasonable financial structure and business model.In addition,the study also found that Z-score model and KMV model are effective for credit risk warning of debt-issuing enterprises,which can help stakeholders identify default risks earlier than credit ratings.In summary,establishing a thorough and efficient risk warning system for real estate firms with a wide range of adaptability to prevent and eliminate risks for all stakeholders in a timely way is important from a practical standpoint. |
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