Analysis Of Diversified Business And Effects From The Perspective Of Finance Of Xinjiang Zhongtai Chemical Co.Ltd

With the introduction of the Belt and Road Initiative and acceleration of global economic integration,trade,finance,investment and technology have been increasing,especially the development of information science and technology,which has enabled the world to gradually realize information integration and form a "global village".At present,based on the tasks of "de-capacity,destocking,deleveraging",the internal and external situations of Chinese enterprises have undergone earth-shaking changes,leading to the increasingly fierce competition among different enterprises.In the face of such a grim and complex international and domestic situation,many enterprises in China have begun to diversify their operations in order to survive or expand their markets.This dissertation integrates the influence of diversification motivation,diversification identification and diversification on financial performance together and puts forward the effect of diversification on financial performance.As the theoretical support of case analysis,the leading enterprise in the field of chlor-alkali industry in China,Zhongtai Chemical,was chosen as the target enterprise.In the research,the motivation of diversification is analyzed.First,as is well known,the traditional chlor-alkali product market is almost saturated,in order to survive in the fierce competion,the company has to find new downstream enterprises to transfer excess capacity.Second,benefiting from the national policies,the company successfully extended its downstream industrial chain.Third,due to the sluggish development of the chlor-alkali market,the company must explore new profit growth fields to maintain its sustainable development.Fourth,under the influence of synergy,it is necessary to refine the whole industry chain model to optimize the allocation of resources.Fifth,diversification can largely enhance the survival ability of the enterprise in all kinds of business risks.Both premium and discount exist in the impact of diversification on the financial performance of enterprises is.The diversified operation of China-Thailand Chemical Co.,Ltd.exerts its potential synergistic effect on many aspects of the industry field.For example,the company's operating revenue is obviously increased and the remaining production capacity of the chlor-alkali plate is successfullytransferred.Moreover,the cost of chlor-alkali and textile plate products are largelyreduced andthe trade plate makes "produce and sell" a doubleharvest.At the same time,the product market pricing power has beeneffectively enhanced so that a premium to financial performance is gradually formed.Therefore,Sino-Thai chemistry remains far ahead of the economic downturn and becomes an immortal legend in the industry.Although its degree of diversification has been relatively high,in the early stage of diversified management,there are still some problems in its development.Hence,in this dissertation some suggestions for its diversification are proposed:(1)the company may optimize the resources of the enterprise by strengthening the main business and eliminating unsuitable industries;(2)they may implement product differentiation and increase product market share as well as optimize the financial structure and improve the overall profitability of the enterprise;(3)the problem of multiple discounts may be prevented if they don't take the agency into consideration;(4)Last but not the least,reasonable diversification strategies should be cautiously formulated to ensure the diversification to be conducted in a scientific way.In summary,the research in this dissertation can not only provide a reference for other chlor-alkali chemical enterprises to develop diversification strategies but also significantly promote the healthy development of chlor-alkali chemical enterprises.