A Study On The Debt Paying Ability Of Listed Real Estate Companies In China

As a special commodity, house property has the dual attributes including investment and consumption goods. The depression of real estate industry is not favorable to push economic development, solve social employment and keep social stability. However, if the investment on real estate goes too much, the continuous growth of housing rate tends to give rise to a bubble economy, thus triggering economic crisis. Therefore, China pays a special attention to the development of real estate, with more attention on macro-control policies than other industries. The operation of real estate enterprises in China to a great extent relies on liabilities, with strong dependence on debt funds. As a hot industry lasting for so many years, real estate industry has the loan transaction exponentially increase during the process. Especially, most of capitals in this industry come from the loans in the banks. Under this context, this paper which targeted on real estate industry and analyzed the influences of its liability structure on debt paying ability has a great practical significance. What’s more, the sample listed enterprise of real estate studied in this paper is the top one in the industry, which is a typical representative. This kind of enterprise can well reflect the common features of this industry and in the mean time can accurately present problems in the industry.This paper theoretically elaborated the factors affecting enterprises’debt paying ability, and analyzed operation status of real estate enterprises from several aspects. At the same time, it empirically set up the indexes of debt paying ability for real estate enterprises, and then identified the influences of debt structure on debt paying ability. During the analysis of operation status of real estate enterprises, it pointed out the financial features of real estate industry, including capital-driving mode, great needs on financing, asynchronous profit statement caused by long project period, great fluctuation of capital flow, strong industrial periodicity, great fluctuation of profit ability, etc. During empirical analysis, this paper selected 120 A-share listed enterprises of real estate, with 114 enterprises left after removing the corporations which were abnormal or lack financial data. According to their related financial data during 2009-2015, with the method of factorial analysis, it comprehensively took total 13 indexes into considerations including debt paying ability index, operation ability index, profit ability index, development ability index and acquisition ability index of cash, thus building comprehensive assessment model on enterprises’ debt paying ability. After that, with identified debt paying ability index as the dependent variable which reflected enterprises’debt paying ability, it regarded the structure of debt sources as the starting point to analyze debt structure, and selected four indexes including current liability ratio, long-term liability ration, commercial credit ration and loan ration from banks. It utilized econometric analysis of panel data, and finally got the influence degree of debts with different periods and sources on debt paying ability.The result of this research shows that, average debt paying ability index of Chinese listed enterprises of real estate is down swing, with the whole industry in the down stage for a long period; the period of average debt paying ability for real estate industry is not synchronous with its macro-control period, but basically consists with its performance period; the value of scale effect for real estate industry is outstanding. In the future downward area of industry when demographic dividend disappears and urbanization overly increases, the differences of leading, medium and small traders of real estate on debt paying ability will get much more obvious, and the industry may be faced with the differentiation trend in which the strong gets much stronger continuously.