Research On Performance And Financial Risk Of Merger And Acquisition Of Haihang Group

With the internationalization of RMB,more and more Chinese enterprises are involving in mergers and acquisitions.The performance and risk of M&A has long been the focus of theoretical and industry research.Although scholars at home and abroad have made a comparatively full study on M&A expansion,there is still no unified conclusion on the relationship between it and enterprise performance.Therefore,it is difficult to simply define M&A expansion as a failure or success strategy.With the tide of China's reform and opening up,Haihang Group has developed and expanded rapidly because of its own special diversified expansion mode.It has developed from a single local air transport enterprise to a multi-format world top 500 enterprise group.However,since the beginning of 2018,Haihang has frequently sold assets acquired by M&A,and the risks behind its diversified acquisitions and high financial leverage financing have gradually attracted public attention.This paper takes the course of M&A expansion of Haihang Group from 2011 to 2018 as the research object.Through the combination of case study method and financial index method,this paper validates and analyses the benefits and financial risks brought by its M&A from multiple perspectives and indicators.The article can be divided into eight chapters: the first chapter is introduction;the second is research method and framework;the third is literature review and theoretical basis;the fourth is case description and analysis;the fifth is performance analysis of Haihang Group's M&A;the sixth is financial risk analysis of Haihang Group's M&A;the seventh is corresponding evaluation,and the last chapter is the summary and suggestions.This paper holds that although the M&A rapidly expanded assets scale and business income of the company,the risk raised is greater than its performance.From the perspective of profit analysis,the improvement of the profitability of M&A in different business sectors is far less than that of the consumption of resources in the new M&A sector.At the same time,the main profits of Haihang Group are still heavily dependent on those non-business income source,such as profit and losses onthe changes in fair value,and investment income.From the point of view of risk analysis,the diversified M&A expansion of Haihang Group has brought significant financial risks.Large-scale M&A investment expenditure normalizes the large gap of non-financing cash,leading a large number of rigid debts and limited assets in the capital structure of Haihang Group.At the same time,the group frequently relies on leveraged financing,while lacking the support of healthy operating cash flow.When the macro-monetary policy became more stringent,Haihang Group's radical capital operation strategy accelerated the transmission of financial risk,multiplied the pressure of its capital chain,and finally triggered its liquidity crisis.To sum up,the author suggests that Haihang Group should adopt contraction strategy,abandon the business sector unrelated to the main business and accelerate the divestiture of non-main business assets.Then,the group should concentrate resources and vigorously consolidate its major business,strengthen the coordination and integration between internal business and companies,enhancing the value of the company through fine operation;In a long run,the group shall improve the internal control compliance,risk management and capital operation system.This paper also discusses the security margin of M&A expansion of Chinese enterprises.To a certain extent,it can provide capital operation suggestions for enterprises to maximize M&A benefits under effective risk control.