Study On Trade Financing Business Models Of The KG(HK)CO., Limited

In recent years,the global economy is in a recession period,because of the US Subprime Crisis and the European Sovereign Debt Crisis and The development and spread of local geopolitical instability;while China's domestic economic is slowdown and lack of drive growth momentum also.The newly established overseas small state-owned company in the unfamiliar overseas business environment,if not able to make use of industrial advantages in domestic group company,facing the global market independently,how to find a way which is suitable for their own development and expansion,is a major problem facing now.This article take KG(HK)CO.,LIMITED as an example,study on the trade financing business models,which looked to the certain model function to this kind of the newly established overseas small state-owned company to face the fierce competition of the market to find the direction of survival and development.Initially,this dissertation introduces the background,objective and meaning of the trade financing business model,and combines with domestic and international reviews to demonstrate the research status of current topic.In comparison with external systematic and scientific research system,although our country commence this research relatively late,the evolution is relatively fast and the development pace is promising.with illustrating couples of basic theories and concepts,the conclusions is that the basis of the design of trade financing business models is“Self-liquidating trade finance”and “Macmillan Gap”is the motivation of market opportunities.Secondly,the basic situations,business scope,business situation,capital structure and operational objectives of the KG(HK)CO.,LIMITED have been introduced.Through the thorough study and analysis in the present situation and environment of China's trade financing,a conclusion is proposed.The KG(HK)CO.,LIMITED under the background of favorable policies and market opportunities is very suitable for carrying out the business of trade financing,because of the business advantage,the group's industrial influence and the advantage of low cost of financing.Furthermore,according to specific business data of Hongkong company,aspects such as application scope,operation procedure,profits capacity,costs ratio and risks control of current 4 kinds of trade finance business models which are“Buy the Bill of Loading Model”,“Prepayment Model”,“L/C to L/C Model” and “Settlement for Account Model”,have been conducted via data analysis,SWOT analysis and comparison analysis,proposing questions of financial costs and relatively high risk coefficient which ubiquitously existed in present model.In order to figure out above problems,lowering finance costs and strengthening risks protection and control as the principle and thought of the construction of new model,“Buy Actuals Model”,“Protocol-Modification Model” and “ Purchase-Sell Chain Model ” have been designed,afterwards,the thorough comparison analysis of new model and present optimum model have been implemented;the new model excel the present model with respect to some aspects like profits capacity and risks protection and control and thus the new model will be the choice of the future business initiation of Hongkong branch.Lastly,through the construction of present trade financing business model investigation and new model of Hongkong branch,the conclusion of utilizing the “Self-liquidating trade finance” to compensate the “Macmillan Gap” has been drawn;The business finance model of Hongkong branch can not only maintain its sustainable operation and development,but also solve the difficult of challenging financing of middle-sized and small enterprises.