Research On Default Risk Of Longguang Holding Bonds Based On Z-score Model

In the face of the complex and volatile international situation,China’s fiscal and monetary policy changes,coupled with the impact of the epidemic in the three years since 2020,China’s economic downward pressure has increased,and the bond market has suffered a greater negative impact.Influenced by the macro leverage reduction policy,the number of bond defaults peaked in 2019,at 191.Under the policy of "lenient fiscal and monetary policy",the trend of bond default will gradually slow down from 2020,even if there is an epidemic.By 2022,18 enterprises in China’s bond market have defaulted,19 less than that in 2021;The scale of defaulted bonds was 31.1 billion yuan,down 76.5billion yuan from the previous year.It can be seen that the state attaches great importance to the healthy development of the bond market.If the bond default is too significant,it will not only increase the difficulty of enterprise financing,but also reduce investor confidence.Enterprises should pay attention to their internal and external environment changes,attach importance to their own business conditions,and strictly control the risk of bond default.Longguang Holdings,as an excellent private real estate enterprise,relies on the rapid development of the Greater Bay Area of Guangdong,Hong Kong and Macao,and will become a "100 billion real estate enterprise" in 2020.In 2022,the debt of Longguang Holdings was thunderous,and the problem of crazy expansion since its listing in 2013 was finally exposed,followed by 21 bond rollovers,temporarily easing the company’s debt repayment pressure.Based on the occurrence of the above events,this paper uses the relevant concepts and theoretical basis of bond default risk to first understand the current operation and financial situation of Longguang Holdings,providing a data basis for the later research;Secondly,based on the Z-core model,the paper analyzes the bond default risk of Longguang Holdings.According to the results of the model and the cash flow statement,it analyzes the risks exposed by the company from three aspects of operating activities,investment activities and financing activities,and then analyzes the causes of the company’s risks in depth;Finally,according to the risk performance and cause analysis,put forward corresponding countermeasures for the company.Through the analysis of Z-core model,the Z value of Longguang Holdings in the past two years is lower than the optimal split point,and the Z value in the middle of 2022 is the smallest,which indicates that the company currently has a high risk of bond default.Due to the epidemic situation,the large number of restricted assets,blind business expansion,and excessive debt raising,which lead to the risk of bond default,we hope that the company can recover as soon as possible and promote the healthy development of the real estate industry by flexibly expanding the main business sales,actively activating assets,paying the debt by stages,and reasonably planning business expansion.The Z-core model established by stepwise discriminant analysis and ZETAC model has higher accuracy in judging the risk of bond default,and taking Longguang Holdings as an example can further explore the current problems and future development prospects of private real estate enterprises.