Research On Financial Performance Of China Grand Auto Strategic Transition

China's passenger car owners mainly in the traditional 4S retail stores,with China's growing demand for passenger cars,4S stores are expanding rapidly,competition is becoming increasingly fierce,profitability gradually reduced.Correspondingly,the automobile integrated service market,which accounts for most of the profits of the automobile industry chain,is gradually rising.Faced with this situation,automobile dealers have begun to carry out strategic transformation in order to improve competitiveness and achieve sustainable development.This paper uses case analysis method to study the transformation of China Grand Auto Service Co,Ltd.(hereinafter referred to as: CGA)financial performance change after the transition from sales-oriented strategy to service-oriented strategy.Firstly,this paper is based on the existing literature and relevant theories on strategic transformation and financial performance,with the help of PEST analytical method and Porter's Five-Force Model find that the motivation of strategic transformation is policy support,the development of traditional 4S distribution industry is sluggish,and the competition is fierce in the same industry.From the analysis of internal environment,we find that the motivation of strategic transformation is to expand financing channels and raising profit level,and obtain sustainable competitive advantage.Secondly,this paper takes backdoor listing as the beginning of strategic transformation,using event study method,selecting event window and estimation window,through regression analysis to establish the equation,the results show that the cumulative excess return after the announcement of the highest 59.29%,indicating that the strategic transformation events in the short term increased shareholder wealth;the index analysis method compares the solvency,operating ability,profitability and development ability before and after the strategic transformation vertically and horizontally,and finds that the financial indicators have been improved after the transformation;the EVA evaluation method is used to measure the performance changes before and after the strategic transformation,and the economic value added is greater than before the transition.Then this paper further uses DuPont analysis method to find out the reasons for the change of financial performance of CGA strategic transition,and analyze the possible risks.Finally,this paper puts forward some suggestions,such as optimizing capital structure,strengthening cost and expense control,improving the payback period of accounts receivable,and establishing the risk control system of financial leasing.This case study can not only provide reference value for the current and future development of CGA,but also provide reference for other private enterprises in strategic transformation.