Analysis On The Path And Effect Of Cross-industry Transformation Of Listed Companies In Financial Distress

Among the listed companies in China,there is a category of companies that are specially treated with because of financial difficulties.After special treatment,these companies have to turn losses into profits through possible methods to retain listing status.The most common method is earnings management because it is difficult to improve business performance in a short period of time for financial distressed companies.However,the earnings management has not thoroughly solved the financial difficulties of the specially treated company from the perspective of sustainable development.At the same time,there is a strategy named cross-industry transformation that can adjust a company’s industry orientation and obtain new profit growth which can also provides guarantee for a company’s sustainable development.The author chooses*ST Jianfeng as the research object,and analyzes the path and effect of its cross-industry transformation to explore inspiration after briefly describing the performance of JianFeng’s financial distress.As a listed company in financial distress,*ST Jianfeng has successfully transformed from the fertilizer industry to the pharmaceutical business through cross-industry transformation strategy,which also helps it get out of the financial trouble.After introducing the present research of cross-industry transformation and financial distress at home and abroad,this dissertation gives the relevant concepts and theoretical basis,and then analyzes the case of*ST Jianfeng cross-industry transformation.The case study section,firstly,briefly introduces the basic information of JianFeng company,describes its financial distress performance,and summarizes the reasons for its transformation,including:overcapacity in the original fertilizer industry,failure of internal industrial transformation,the need to retain listed qualifications,and falling into financial difficulties;secondly,compares the possible paths,and introduces path selection and implemention process of*ST Jianfeng;thirdly,expounds the effects from several aspects,such as:the improvement of profitability and operational developing capacity.At the end of this dissertation,the author summarizes the conclusions of the Jianfeng’s success by applying the cross-industry transformation strategy to get out of finance trouble,and explores the enlightenment from it.By the case study of*ST Jian feng,this dissertation,on the one hand,provides a new vision for listed companies in financial distress to get out of the difficulty;on the other hand,it also provides reference in the path choosing and effectiveness of the cross-industry transformation for listed companies in the special background of financial distress.