A Case Study Of Financial Strategy Under The Specialized Business Model Of Cosco Shipping Holdings

As a derivative industry based on international trade,shipping industry developed rapidly in the early years under the background of prosperous trade.However,the disaster of the 2008 economic crisis led to the sluggish global trade environment.In the following years,the dislocation of the weak demand and expansion of shipping capacity supply made the shipping industry continue to be depressed.Homogenized competition made shipping enterprises fall into the battle of low-cost strategy and price war.The bottom fell out of the industry in 2016.In this context,strengthening alliance and enhancing route concentration have become the main method for large shipping enterprises to digest excess capacity,and mergers and reorganizations in the industry have become close and frequent.Cosco shipping holdings was born in a new chapter of restructuring in the industry composed by China Cosco Group and China Shipping Group,the country’s two major shipping companies.In order to solve the business dilemma,Cosco shipping holdings combined the highly homogeneous containers transport business of the two companies through this reorganization,and separated the dry bulk cargo transportation business which suffered heavy losses due to the massive expansion of capacity in the early years.Under the situation that the diversified business structure could not achieve coordinated development,the company simplified the business scope to reduce the burden of the company,and started the transformation road of its specialized operation.However,the new business model needs to formulate and implement the corresponding financial strategy to support the business activities of the enterprise.Cosco Shipping Holdings closely seized the policy opportunity of "One Belt and One Road",made full use of various favorable factors by virtue of its innate advantages of strong container transport assets,developed and implemented supporting financial strategies based on the company’s new strategic positioning,stepped out of its difficult to be reproduced professional business road,and comprehensively improved the company’s value creation ability and sustainable development ability.This thesis first expounds the research background and significance,at the same time,reviews the relevant studies of the specialized business model and financial strategy in the academic circle,and then defines the concept of the research content and establishes the basis of relevant theories.Then,combined with the case of the specialized business transformation of Cosco shipping holdings,the industry and company background,necessity,feasibility,current situation of financial strategy and specific implementation points were introduced.Then the financial strategy matrix model and financial strategy performance evaluation index system were adopted to analyze and evaluate the financial strategy performance of Cosco shipping holdings under the specialized operation mode.It was found that Cosco shipping holdings was in a period of rapid development of specialized operation transformation,and its value creation ability and sustainable growth ability continue to increase significantly.In addition,this thesis respectively from the financing strategy,investment strategy,operation management strategy and income distribution strategy in-depth analysis of the financial strategy of Cosco shipping holdings’ key points and the corresponding implementation effect.In terms of financing strategy,this thesis analyzes the application of debt instruments such as medium-term notes and ultrashort-term financing bonds of Cosco as well as the measures taken by equity financing to reduce leverage,and finds that its capital structure has higher debt risks compared with the industry,and its short-term solvency is strong but its long-term solvency is not.In terms of investment strategy,this thesis analyzes the investment direction and scale of Cosco shipping holdings,and finds that its investment activities can bring relatively considerable returns and growth ability of the enterprise.In terms of operation management,this thesis mainly analyzes and interprets the company based on revenue cost management and working capital management,and finds that the company’s profitability is increasing,but its cost control ability is relatively weak,its asset management ability is high,but there are still shortcomings in accounts payable management.In terms of income management,this thesis mainly analyzes the relationship between dividend payment level,operating structure and capital demand,and finds that the lowlevel dividend policy of Cosco shipping holdings can retain sufficient funds for the company,but it is not easy to protect the rights and interests of minority shareholders.Finally,through the analysis and evaluation of the financial strategy under the specialized business model of Cosco shipping holdings,this thesis summarizes the experience worth learning and some matters that still need attention.For other specialized enterprises or peer enterprises,using new financing tools to expand financing channels can obtain sufficient working capital,reduce financing costs,digital technology and collaborative business development around the core industry can greatly enhance the core competitiveness and risk resistance ability of enterprises.However,enterprises also need to pay attention to the rationality of capital structure to reduce risks,and learn to make full use of receivables and payables management to relieve capital pressure.Enterprises should also pay attention to balance capital and market confidence in income distribution,enrich income distribution methods and appropriately improve the distribution level,so as to achieve a win-win situation between enterprises and investors.