Research On Financial Risks Under The Diversification Strategy Of HNA Grou

With the rapid development of world economic integration and the sharing of resources in trade and finance,the general environment for business survival is changing.As single economies gradually explore new development paths,they begin to experiment with diversification strategies.However,diversification has two sides:on the one hand,it can bring positive results,such as cross-industry industrial integration and the growth of corporate interests;on the other hand,if blindly implemented,diversification may cause losses due to industrial information asymmetry,market changes,debt burden and other factors,triggering financial risks and falling into financial crisis.For a long time,diversification has been the focus of attention of scholars in various countries,and the impact of diversification on enterprises has also been the focus of debate.Based on this,this paper raises two questions: the first question is how does HNA Group’s diversification affect financial risk? The second question is how should the diversification strategy be implemented and the financial risks be controlled? Based on the theoretical foundation of the literature on diversification and financial risk,this paper firstly uses a case study approach,focusing on the diversification history of the HNA Group from its establishment in 1989 to the present.Secondly,it calculates the degree of diversification,identifies the financial risks in financing,investment and operation and introduces a linear discriminant model of diversification-Z-score,calculates and analyses the four major financial indicators of HNA Group,then conducts an analysis of the impact of the degree of diversification on the financial indicators and summarises the diversification strategy and financial risks of HNA Group.issues.In order to solve the two problems raised in this paper,on the one hand,we suggest to HNA and various enterprises how to implement diversification and how to control financial risks,and on the other hand,we try to provide case support for the diversification development of domestic enterprises.The analysis leads to the following conclusions: firstly,HNA Group’s excessive multi-industry chain expansion has weakened its core competitiveness;secondly,HNA Group’s diversification is too broad to generate synergies;thirdly,HNA Group’s overreliance on the leverage model has solidified its capital chain and generated serious financial risks;and finally,HNA Group’s financial early warning mechanism is missing and the group’s management lacks attention to financial risks.Based on this conclusion,this paper gives the following countermeasures to prevent financial risks under HNA Group’s diversification strategy: firstly,consolidate core competitiveness and develop appropriately through innovation;secondly,carry out moderate diversification to bring into play the synergy effect;thirdly,reasonably exert the leverage effect and avoid intensive financing;finally,establish a financial early warning system and strengthen the attention to financial risks.