A Analysis Of China Evergrand's Financing Strategy

In 2016,the price of China's real estate boomed.Real estate has become the topic of people's talk once again,and real estate companies also become a important issue in the study of securities traders and financial institutions.China Evergrande in 2017 became the champions for "sales volume" and "sales amount" beyond Vanke,and also become China's and even the world's largest real estate company.But the criticism of Evergrande's highly leveraged model has never stopped.At the middle of 2016,the actual ratio of debt was more than 97%.Big financial institutions downgraded its credit rating,but Evergrande's management was optimistic and claimed the company is in good financial condition without any risk.These two diametrically opposed arguments lead financial workers to an in-depth study of the real risks of China Evergrande.This paper is a case study,in which we want to make a systematic analysis on the financing strategy of China Evergrande on the basis of a large number of literature studies.Based on the historical background and the situation of the enterprise,this paper analyzes the financing logic and various indicators of Evergrande financing strategy,and makes a systematic summary of Evergrande cash flow management strategy.Financing and risk,the pair of principal contradiction,is the core topic of financing problem.As innovation points,this paper done mainly research about the nature of the risk of real estate industry.Because of the financial characteristic of the real estate industry,its risk assessment system should be independent of other industries,we carried on the systematic analysis from the perspective of cash flow.Besides qualitative analysis of the financing strategy logic,we make a quantitative analysis of the cash flow gap and financing demand to show the nature of the risk.And take a unique perspective to analyze a recent risk event of Evergrande to show the concrete risk of real estate industry to readers.