| In the past 30 years,the real estate industry has developed rapidly,especially after the implementation of the national "four trillion yuan" stimulus plan,and it has gradually become the pillar industry of our economic development.In order to expand domestic demand,local governments stimulate the development of real estate enterprises through various loose monetary policies.Therefore,in the context of high market profits,the scale of real estate enterprises is constantly expanding,and the leverage level is gradually rising.However,excessive leverage is prone to bring huge financial risks and financial risks.For this reason,the country vigorously promotes the supply-side reform of "three removal,one reduction and one supplement" and has introduced relevant policies such as "three red lines" to solve the problem of excessive debt operation of real estate enterprises and resolve their financial risks.High debt ratio of real estate enterprises to reduce leverage is imminent.As a representative of private housing enterprises,China Fortune Land Development Co.,Ltd has made certain achievements in reducing leverage,which can be used for reference.Therefore,this paper takes China Fortune Land Development Co.,Ltd as the research object and analyzes its leverage reduction measures and effects to provide experience for other real estate enterprises with high leverage problems.This paper introduces the current situation of over-indebted real estate enterprises,analyzes the general motivation,general path and current situation of deleveraging.Subsequently,this paper studies the case of China Fortune Land Development Co.,Ltd Deleveraging.This paper first reviews the capital structure and debt situation of China Fortune Land Development Co.,Ltd,and analyzes the causes of the company’s high financial leverage and the motivation of reducing leverage.Then,explore the measures of China Fortune Land Development Co.,Ltd to reduce leverage: one is to absorb equity financing,expand the company’s capital;Second,issue perpetual bonds to ease financial pressure;Third,improve the management level,innovation profit model;Fourth,the implementation of debt restructuring,resolve the company’s risks.Finally,the longitudinal comparison of the "three red lines" index and the solvency index before and after the deleveraging of China Fortune Land Development Co.,Ltd,as well as the horizontal comparison with the peers,is made to analyze and summarize the effect of the deleveraging of China Fortune Land Development Co.,Ltd.Research shows that the leverage reduction measures taken by China Fortune Land Development Co.,Ltd are effective and can reduce the financial risk of the company.Based on the above research,this paper draws the following conclusions on the deleveraging effect of China Fortune Land Development Co.,Ltd: first,short-term solvency is improved,and realisable assets increase;Second,the long-term solvency is enhanced,and the ability to pay expenses is improved;Third,the capital structure was slightly improved and the debt ratio was moderately reduced.However,there are still problems such as poor asset operation,slow capital turnover,continuous increase of total liabilities,large proportion of interest-bearing liabilities,single financing channels and large cash flow pressure.In view of these problems,the following suggestions are put forward: first,optimize the asset structure and speed up the efficiency of capital flow;Second,control the scale of liabilities,reduce the proportion of interest-bearing liabilities;Third,expand financing channels and use government bailout funds wisely.In addition,China Fortune Land Development Co.,Ltd deleveraging measures for other enterprises in the industry to provide referential experience and enlightenment: first,increase the total asset scale,accelerate the advance accounts settlement speed;Second,reduce the amount of interest-bearing liabilities,improve the internal financing capacity;Third,increase cash inflows and reduce operating cash outflows. |
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