Study On The Causes Of Default Of Evergrande Group’s Financial Products And Countermeasures

In the past five years,the explosion of third-party financial products has occurred frequently.In 2021,the third-party financial default of the real estate department has entered the high-frequency area.Hengda Group,Baoneng Group and Contemporary Real Estate have all been exposed to default problems in their financial products.In particular,Evergrande is a leader in the world ’s top 500 real estate companies.In the past,the scenery was infinitely good,and now how to fall into the payment crisis.Compared with traditional bank financial products,the third-party financial market has the characteristics of low entry threshold and lagging supervision,so many large and medium-sized real estate companies have set up their own financial companies.However,in the face of the third-party financial market mixed with dragons and snakes,many third-party financial institutions internal risk control measures are useless,insider trading,capital pool operation is not uncommon,the trend of product default is becoming more and more intense,which reflects the third-party financial industry management confusion,business process is not standardized.Based on Evergrande Group and its subsidiary Evergrande Wealth as the research object,this paper makes a detailed analysis of the business model of the third-party financial institutions of real estate enterprises from a micro perspective,and deeply understands the reasons for the frequent defaults of real estate financial products.Focusing on the interest relationship between the third-party financial institutions and Evergrande Group,this paper makes a detailed analysis of the reasons for the Evergrande Wealth payment crisis,and analyzes its internal and external incentives.According to the order of time development,this paper describes the specific process of Hengda Group ’s financial product default,and analyzes the financial risk of Hengda Group through Z-Score model.The goal of selecting Evergrande Group as the research object is to provide clear ideas for the successful transformation of China ’s financial product industry and the improvement of corresponding supervision.When analyzing the internal and external reasons,the external reasons are mainly reflected in the loose supervision of third-party financial management,low entry threshold,too simple audit process,and lack of clear regulatory responsibility subjects.At present,the third-party financial management license system has not formed specialization and standardization.It only needs to establish an investment company to operate.The internal causes are unreasonable and non-compliant financial products,high risks in the sales product model,chaotic company management,and debt accumulation by Evergrande Group.By analyzing the financial problems of the group and the default payment of Evergrande Wealth,as well as the influence of the group on the subsidiary(Evergrande Wealth),it is concluded that the main internal cause of Evergrande Wealth product default is the loss of independence caused by improper business model,and the high risk of sales product model;the management of the company is arbitrary and special;the most critical is that the group ’s blind ’ diversified ’ development,diversified income can not make up for the loss of diversification,resulting in problems in the group ’s capital chain,and ultimately has a negative impact on Evergrande ’s wealth cash flow.Based on this,corresponding suggestions are given from three perspectives : third-party financial companies,investors and regulators.First,enterprises need to improve the professional level and risk awareness of sales personnel,and establish a sound risk supervision system.Second,the regulatory authorities should strengthen the supervision function and form an all-round supervision system with the national financial supervision department as the main body and the combination of industry and social supervision.The financial regulatory authorities should introduce special laws and regulations directly targeting third-party financial institutions to crack down on illegal acts,otherwise the cost of default is too low,and the institutions are fearless.Third,investors should improve their financial literacy and do a good job in relevant financial knowledge reserves.Only when the third-party financial companies,investors and regulators work together,can we build a reasonable,healthy and efficient third-party financial market.