Case Study On Financial Distress Of Hengkang Medical Group Co.,Ltd

With the increasing growth of the capital market,the number of listed companies has soared.At the same time,it has become common for listed companies to face financial difficulties and delisting risks,which has a huge impact on the development of the company itself.And also brings creditors and equity holders.In order to lose money,it is necessary to conduct in-depth research on financial distress.As the change of environment,the progress of science and technology,people’s lives have undergone rapid changes.Bad living habits have made people’s risk of illnesses sharply increased.As a populous country,my country is also making every effort to promote medical reforms in order to solve the problem of difficult and expensive medical treatment.In 2009,my country’s medical and health system began to reform and encourage enterprises to run private hospitals.My country supports and encourages public hospitals and private hospitals to compete and develop together to improve medical efficiency and service levels.Hengkang Medical was established in2001 and started with the scarce Tibetan medicine "Unique".With its excellent market performance,it was listed on the A-share market in 2008.In 2013,Hengkang Medical began to buy and buy expansion for the medical industry.In 2015,it reached a market value of more than 30 billion yuan and became the first share of the hot private hospitals at the time.In 2017,the M&A fund was established,and the mergers and acquisitions formed a goodwill of 2.5 billion yuan.In 2018.There was a loss of1.388 billion yuan that year,and a loss of 2.498 billion yuan in 2019.It has suffered substantial losses for two consecutive years and is facing a delisting crisis.The high-premium mergers and acquisitions of medical companies that have formed a large amount of goodwill have greater reference value.Based on the constant Hengkang medical as the research object by the phenomenon of the combination of the causes of the formation of financial distress distinguished analysis theory,in order to solve the financial difficulties gives some suggestions,this article first chapter presents the research background,content,and domestic and foreign scholars have put forward the financial difficulties of related theory,in this paper,the second chapter briefly summarized the development of the company and clean up some of the policy after the new reform the health care industry,and analyzes the solvency,profitability,capital and assets of Hengkang Medical in combination with financial and non-financial indicators to illustrate the plight performance of Hengkang Medical and at the same time,typical companies in the same industry are selected for horizontal comparison for the comparability of relative indicators.The third chapter of this article starts from the composition of the indicators,analyzes the reasons for the changes in related projects,and determines the collateral effects.Hengkang Medical’s trouble is due to its over-radical business strategy,continuous high-premium mergers and acquisitions that have generated huge goodwill,and most of the merger considerations The short-term borrowing from the company and the unreasonable financing structure planted the risk of not being able to repay the debt;after the transition to the medical industry,the income and cost did not match: mainly due to the declining main business income and the rapid increase in expenses during the period.Faced with a large number of lawsuits after the turnaround,including the equity transfer disputes of the original shareholders of the acquisition of the hospital,and the lack of funds,the inability to pay the compensation and acquisition funds of the acquisition fund was sued;the failure to complete the performance indicators led to a substantial impairment of the company’s goodwill and management Large bad debt losses also occurred in the accounts receivable not in place.In this paper,the fourth chapter puts forward some suggestions to solve the constant Hengkang Medical current dilemma: to choose the appropriate enterprise development strategy,including financing strategy and investment strategy,and enhance the core competition of the main business is mainly aimed at the company’s medical services and drug sales.It is reasonable Evaluate expected returns,formulate reasonable performance commitments,and optimize the company’s asset management system.At the same time,it also gives investors,the industry that will enter the hospital,and the enterprises that are operating private hospitals some enlightenment.