Research On The Financial Strategy Of The HL Co., Ltd. Under Its Asset-light Mode Of Operation

Financial strategy is the capital structure and capital plan for the company to cooperate with its own development and to gain the competitive advantage. The capital plan includes three major aspects: fund raising, fund investment and dividend, and management of working capital. Financial strategy is a driving factor for profit mode, and operational mode needs to match the financial strategy. Nowadays, many companies are using asset-light profit model. With a minimum capital investment in inventory and fixed assets, and by the long-term accumulation of effective supply chain, customer resources, brand culture,technology research and development, human resources and other light asset, leveraging and integrating inside and outside resources of the enterprises especially the non-financial resources, many of these companies have created a unique competitive advantage and achieved a fairly good corporate financial performance. HL Co. Ltd. is a typical company using the mode of asset-light operation. Its achievements in the product range, business model, operational management and brand culture, etc., are a good example to other companies. However, there are still some problems and challenges facing the company in its efforts to match its mode of operation with its current financial strategy.This thesis chooses the HL Co. Ltd. as a case and analyzes the company’s financial data and business information in recent five years in the hope of identifying the problems facing the company. First of all, it analyzes the characteristics of asset-light operation, and then combined with the light asset profit model and the financial structure of the theoretical framework, from the different aspects, the thesis analyzes the advantages and disadvantages of the financial strategic arrangement in supporting HL company’s asset-light profit model. Finally, it puts forward constructive suggestions for the HL to make improvements in its financial strategy. This thesis aims to highlight the unique role of the financial strategy in driving the asset-light profit model through analysis of the HL case and to draw some implications for other enterprises in the garment industries that are operating under the asset-light operational mode.