Case Study On Debt Crisis Of *ST Sino Great Wall Co.,Ltd

Capital-intensive enterprises usually need continuous financing to maintain daily operations and scale expansion.In terms of financing methods,debt financing is a more common financing method.Many companies have obtained a large amount of funds by lending to financial institutions such as banks,providing strong cash flow support for subsequent expansion.However,many enterprises lack their own financial risk management capabilities,failing to realize the adverse effects of excessive financing on the enterprise,causing their own excessive debt and imbalance in capital structure.In the long run,companies will be plunged into debt crisis,and even bankruptcy and delisting will cause huge losses to investors.Therefore,the corporate debt crisis cannot be ignored.This article combines typical cases to analyze the causes of corporate debt crisis,and then puts forward specific recommendations accordingly,which has very important practical significance for many stakeholders such as listed companies and investors.This article selects * ST Shencheng as a case study.* ST Shencheng is a construction company and listed on the Shenzhen Stock Exchange in 2015.After the listing,* ST Shencheng actively expanded the domestic and overseas markets,contracted a large number of engineering orders,and the company's performance has also made rapid progress,and the development momentum is good.But the good times didn't last long.The company suddenly broke out of debt crisis in 2018,and soon fell into a tragedy of delisting.Why is a rising listed company going bankrupt due to debt problems in just a few years? This issue deserves our in-depth study.First,this article introduces the background and significance of the research on the * ST Shencheng debt crisis,shows the research value of the article,and explains the research methods and research content.Secondly,it introduces * ST Shencheng in detail,sorts out the process of its debt crisis according to the time axis,and analyzes the specific performance of the debt crisis in combination with financial indicators.Thirdly,through qualitative and quantitative analysis,the causes of * ST Shencheng Debt Crisis are summarized,including the macroeconomic and industry environmental impacts,insufficient operating capacity,insufficient financial risk management,and weak internal control.Finally,this article starts from the four main bodies of listed companies,investors,financial institutions and regulators,draws corresponding enlightenments,and proposes targeted solutions.Listed companies should pay attention to internal and external operating risks,strengthen monitoring of the external economic environment and industry environment,and at the same time do a good job of enterprise operation management,financial risk prevention and internal control construction;Investors should always pay attention to the operating conditions of the company.Small and medium shareholders should use effective means to safeguard their own interests and reasonably limit the rights of major shareholders.Banks and other financial institutions should pay attention to the risk assessment before and after the loan,and focus on the enterprises with “multi-debt”,and establish risk control programs in advance to minimize investment losses;Supervisors should increase penalties for companies that violate regulations and strengthen the review of financial information of ST companies.