On Financial Risk During The Strategic Transformation Of Real Estate Enterprises In China

Housing price has always been one of the topics that people are most concerned about."Houses are for living,not for speculation," the 19 th report said.China's control policies on the real estate industry are increasingly strengthened and the means are constantly enriched.In 2015,the real estate industry entered the "silver era".The continuous decrease of exploitable land resources,the increasingly improved urban construction and the decrease of the new population accompanied by the decline of people's housing demand prompted the real estate enterprises to make strategic transformation and explore new business models.But the real estate enterprise during the strategic transformation has generally produced the financial risk.In order to study the financial risks during the strategic transformation of China's real estate enterprises more accurately,this paper selects the leading enterprise A in the diversified strategic transformation of the real estate industry as the research object and conducts A as case study.Firstly,based on the financial reports disclosed by A over the years,this paper selects the data in the period of rapid development of residential business and the period of strategic transformation as the research interval.This paper analyzes the financial status quo of A from four aspects: debt paying ability,operating ability,profitability and growth ability.It is found in this paper that after entering the strategic transformation,the turnover speed of inventory of A decreases significantly,the recovery period of capital is prolonged,the proportion of interest-bearing liabilities in total investment is increased,the asset-liability ratio rises after excluding the advance receipts,and the solvency and operating capacity of the enterprise decline.At the same time,the creation of operating profit of A is still mainly dependent on residential sales.The new business has not generated new profit growth points,and its future growth space is also questionable.Therefore,this paper believes that A has generated financial risks during the strategic transformation.Then,this paper studies the specific reasons for the financial risks arising from the strategic transformation of A.There are five main reasons.First,the new business of A is mostly in the incubation period,and the capital demand increases sharply.Second,A advocates external growth strategy for strategic transformation.It conducts a large number of mergers and acquisitions in A in a short period of time and changes its asset structure.Third,the business model of A has been changed from single to rich,which extends the payback period of its capital.Fourth,A's investment evaluation system for various new businesses is not complete,which breeds investment risks.Fifth,the personal goals of the majority of employees in A do not match the goals of enterprise strategic transformation,and the strategic transformation is hindered.Finally,this paper puts forward countermeasures to prevent corresponding financial risks according to the above five reasons.There are five specific countermeasures.First,the new business of A is mostly in the incubation period,and the capital demand increases sharply;Second,improve capital operation strategy,focus on internal growth strategy,and introduce asset-light operation mode;Third,adjust the land acquisition strategy,adopt a more robust land acquisition strategy,improve the efficiency of land development and sales;Fourth,all kinds of new businesses should be customized investment measurement model and a sound investment evaluation system;Fifth,improve the "partnership system" to effectively combine the personal goals of employees with the goals of strategic transformation of the enterprise.