A Study Of Bond Defaults In The Gold And Jewellery Industry

Prior to 2018,there was no default event in the gold jewellery processing industry.Since September 26,2018,Gangtai Group Co.,Ltd.announced that it was unable to pay the “16 Gangji 01” interest and resale amount in full on the required date.Credit risk began to erupt intensively.There were 13 gold and jewelry processing companies listed on the Shanghai and Shenzhen stock exchanges,and four of them defaulted,which caused great market attention.This article adopts a case study method,first reviews the history of default in the gold and jewelry industry,uses financial analysis to sort out the common financial characteristics of defaulting companies in the industry,and summarizes the industry default mechanism.On this basis,Gangtai Holdings,which was once known as the "Internet Jewelry First Share" in the industry,was selected for in-depth analysis.First of all,cut through the company's profile and review the entire process of bond defaults to set the stage for the following discussion.Second,from the perspective of external and internal factors,explain the reasons for the default;then,analyze the default events on the company.Existing debt,stock price,and other aspects;Finally,summarize the lessons learned.The study found that the gold and jewellery industry in which Gangtai Holdings is located is in the period of bottom consolidation,the market is fiercely competitive,the company has no brand and technological advantages,and its own business has poor blood-making capabilities.Gap,long-term rolling debt to maintain business operations.In 2018,external financing deteriorated,and negative public opinion was added.The company's bonds defaulted due to internal and external problems.At this point,the company is deeply trapped in asset freezes and litigation,and its operations are unsustainable.Although it is struggling to save itself,the progress of introducing strategic investors and selling assets has been slow,and the investor's compensation process has been difficult.Gangtai Holdings typically reflects the current state of default in the industry.The companies that default in the gold and jewelry industry are concentrated in the low-end market,the competition is fierce,and the overall return on assets is not high because there are no superior brands,poor channel control,or aggressive sales strategies,or blindly implement diversification strategies to achieve profits Growth relies heavily on external financing,and financial fraud is often used to cover up deteriorating cash flow conditions.Aiming at the problems exposed by the industry,in addition to the need for enterprises to maintain the stability of their main businesses and improve their solvency,governments,external agencies,and investors also need to make corresponding efforts.This article researches and summarizes the default events of Gangtai Holdings,theoretically supplements the research perspective with the industry as the starting point,and fills the shortcomings of the case study of bond defaults in the gold and jewellery industry.Opinions on construction are formed for investors to grasp the risk points of investment,and also help regulators to monitor more accurately and maintain market order.