Research On Financial Risk Of HH Group’s Continuous M&A

With the internationalization of the renminbi and the gradual increase in the strength of domestic companies,more and more companies are adopting mergers and acquisitions to expand their internationalization and diversification.The financial risk of mergers and acquisitions has always been the focus of research in the theoretical and industry circles.Following the tide of China’s reform and opening up,HH Group has grown rapidly due to its own special diversified expansion methods.It has grown from a single local air transport company to a multi-format Fortune 500 enterprise group.However,since the beginning of 2018,HH Group has so far frequently sold assets acquired through large-scale mergers and acquisitions.Therefore,the public gradually began to pay attention to the risks of HH Group’s diversified mergers and acquisitions and its high financial leverage.From the perspective of risk analysis,HH Group’s diversified M&A expansion has brought significant financial risks.HH Group’s non-financing cash has a large gap,and this gap has been regularized,which is caused by HH Group’s frequent and large-scale M&A investment expenditures.From the perspective of HH Group’s capital structure,HH Group has too many restricted assets and rigid debts,and often relies on leveraged financing to raise funds.However,the reality is that HH Group lacks the support of stable internal operating cash flow.In the context of increasingly stringent macro-monetary policies,the rapid increase in HH Group’s financial risks is precisely due to its impulsive capital operation methods,which has increased the pressure on the HH Group’s capital chain,making HH Group ultimately facing a crisis of bankruptcy and reorganization.This article takes the HH Group’s mergers and acquisitions from 2013 to 2018 as the research object.Through a combination of literature analysis,comparative analysis and case analysis,it studies and analyzes the diversity of HH Group during this period from multiple perspectives and indicators.Financial risks brought about by the expansion of mergers and acquisitions.This article first gives an overview of HH Group and introduces the status quo of HH Group’s continuous mergers and acquisitions.Then,it analyzes the financial risks of HH Group’s continuous mergers and acquisitions in detail from the aspects of solvency,cash flow and profitability,and uses the Z-value financial early warning model to determine the degree of financial risk of HH Group.Finally,it evaluates the financial risks of HH Group’s continuous mergers and acquisitions and puts forward three suggestions on the financial risks of the company’s continuous mergers and acquisitions in the short,medium and long-term,which have certain practical significance.