The Study On The Impact Of Foreign Exchange Risk On The Corporate Value Of Listed Companies Of Household Appliance Industry

Since the implementation of the reform of the RMB exchange rate formation mechanism in July 2005,the RMB exchange rate has experienced significant fluctuations,and there has been a significant cyclical shift in appreciation and depreciation.The foreign exchange risk caused by exchange rate fluctuations has become one of the risk factors that can not be ignored in the daily business activities of enterprises.This paper takes the TCL Corporation as an example which has an earlier implementation and higher degree of internationalization in China's home appliance industry.Firstly,it analyzes the main foreign exchange risks faced by TCL Corporation and the foreign exchange risk management situation,and then further examines the impact of the foreign exchange risk on the company's cash flow and stock returns and measures the impact of foreign exchange risk on the corporate value of the TCL Corporation.This paper firstly analyes the exchange risk caused by import and export channels,the risk caused by cross-border operation and the economic risks caused by exchange rate changes combined with the actual business conditions of the TCL Corporation respectively from the export proportion,exchange gains and losses,major overseas subsidiaries and market share.The analysis found that the company's overseas business scale has expanded year by year,and the number of overseas subsidiaries has gradually increased,so the foreign exchange risk is also expanding.In the analysis of the foreign exchange risk management of TCL Corporation,it was found that the company effectively reduced the exchange risk by using foreign exchange derivatives,and reduced the transaction risk by cross-border operations.Subsequently,this paper selects the data of TCL Corporation from 2006 to 2018 as a sample,and uses the cash flow regression model and the stock return rate regression model to investigate the impact of exchange rate fluctuation on the corporate value of the TCL Corporation.The results show that the impact of fluctuations in the four currencies of the main overseas income of the TCL Corporation on the company's cash flow and stock returns is not statistically significant.It further illustrates that TCL Corporation has successfully reduced transaction risk and economic risk,so exchange rate fluctuations have not had a significant impact on the company's production and operation.The conclusion of this paper indicates that for enterprises with a higher degree of internationalization,foreign exchange risk will impact on enterprises through export channels,but enterprises can adopt financial hedging and operational hedging meausres to avoid foreign exchange risk.Therefore,this paper is based on the successful practice of TCL Corporation s foreign exchange risk management,and provides positive references for other companies in China's home appliance industry to avoid foreign exchange risks.