Research On Financial Risk Control Of YunDa Reverse Merger

The reverse merger is an important step for Chinese private enterprises to achieve strategic development,but it is also a high-risk way of capital operation.After the reverse merger is successful,enterprises will obtain continuous low-cost and large-scale financing facilities.But high yields also signal high risk.The purpose of this paper is to discuss possible financial risks in the process of the economy through analysing the risk identification and risk control of the reverse merger,combing with the characteristics of the reverse merger in a high-risk situation and a Case Study on Yunda Express backdoor Xinhai Co.,Ltd.shares listed.Then according to the different identification and control of financial risk,this paper provides certain theoretical guidance to Chinese private enterprises when they choose a reverse merger.In the process of the reverse merger,it involves the selection of high-quality shell resources,shell resource valuation,asset replacement method,financing amount demand,capital structure determination and financing method selection,as well as the financial and continuing operation risks in the stage of reorganization and integration after the reverse merger.The main cause of financial risk is the uncertainty and information asymmetry in the whole process,which will lead to the deviation of expectations and final results.On the one hand,in the process of the reverse merger,there are many uncertainties due to macroeconomic regulation and control of the market,changes of government policies,cyclical fluctuations of the industry,as well as enterprise management coordination,internal system,operating policies and business integration and other factors.On the other hand,due to the lack of relevance between the two parties,information asymmetry is not uncommon,which will lead to the existence of financial risks.This paper follows the logical thinking of "backdoor listing related concepts--case background--case analysis--case enlightenment" to conduct research.The discussion of financial risk control strategy and a case study of Yunda Express,this paper mainly identifies the financial risks and control strategies that private enterprises may involve in the whole process of a reverse merger.From the perspective of the shell resources selection and valuation,price game,capital structure and reorganization and integration,it provides an in-depth analysis of the causes and control measures of financial risks.In addition to this,it summarises the control of financial risk through establishing Yunda financial risk evaluation index system which using the analytic hierarchy process.This system evaluates the company's financial risk from four aspects--profitability,debt-paying ability,asset management ability and continuing operation ability.As a leading enterprise in China's private express delivery industry,the development of Yunda Express is not only of great significance to its own profitability but also has a certain impact on China's economic development to a certain extent.