Research On The Causes And Countermeasures Of Credit Bond Default Of Brilliance Automobile Group Holding Co.,Ltd

In recent years,Chinese bond market scale is expanding day by day,but there are also some hidden dangers.Some companies have an optimistic view on the economic development and adopt the strategy of debt development and over financing,resulting in frequent bond defaults.Among the three waves of bond defaults experienced by Chinese bond market,the third wave of default since 2020 is characterized by the increase of defaults by foreign enterprises and the rising proportion of defaults by highly rated technology intensive manufacturing enterprises.Under this background,this paper studies the deep causes of bond defaults of state-owned enterprises and how to improve these causes,reducing the default risk of state-owned enterprise bonds is of great significance.This paper selects Brilliance Automobile Group Holding Co.,Ltd.,a representative of automobile manufacturing enterprises with the latest AAA main rating,as a case study.Firstly,this paper expounds the relevant theories of bond default,the overall situation and default characteristics of China’s bond market,and introduces the enterprise development,default bond information and bond default process of brilliance group;Secondly,by using the mainstream financial data analysis method and the modified Z-score model,this paper analyzes the risk changes before and after the bond default of brilliance group and the reasons for the failure of debt repayment plan;Finally,from the perspective of external factors and internal factors,this paper makes an in-depth analysis of the causes of bond default.The impact of external factors on the debt default of brilliance group is mainly from four angles,such as macro economy,auto industry development,external regulation and COVID-19’s impact,but it is not the main reason for the default.The bond default of brilliance group is rooted in the internal factors of the company.The unreasonable development strategy,lack of internal governance and non-standard financial management of the company jointly led to the bond default.The research conclusion of this paper is that the causes of bond default of brilliance group mainly come from external and internal factors,in which internal factors are the core factors leading to default.First of all,the analysis of external factors is mainly from the following four aspects: the macroeconomic downturn,the development of the automotive industry,the lack of external regulation and the impact of COVID-19.Secondly,the analysis of internal factors mainly analyzes the reasons for the debt default of brilliance group from three perspectives: the development strategy of brilliance group,the internal governance of brilliance group and the financial management of brilliance group.At the level of the company’s development strategy,the main reasons for bond default are that the focus on market integration rather than product research and development leads to the lack of core hematopoietic ability of brilliance group,and the failure of diversified development of brilliance group brings high sunk costs and weakens the profitability of the enterprise.At the level of corporate internal governance,the main reasons for bond default are the unreasonable setting of the company’s equity structure,the embezzlement of interests caused by the company’s executives,the embezzlement of the company’s funds,the damage to the company’s interests and the malicious evasion of bonds in order to preserve core assets.The main reasons for bond default at the level of corporate financial management are the imperfect risk control mechanism of the company,the ineffective implementation of budget and cost control and the problems of financial supervision system.Finally,the research puts forward the countermeasures to prevent bond default in the future.Brilliance group should pay attention to its own technology research and development,optimize the internal resource allocation of the enterprise,avoid excessive diversified development,try to promote the corporate management structure and equity structure,and strengthen the internal and external supervision of the enterprise.