| In August 2020,the state proposed a three-red-line for the assets and liabilities of 12 real estate enterprises,dividing them into four grades of red,orange,yellow and green according to the number of red lines they have touched,and limiting the upper limit of the scale of interest-bearing abilities of each grade,with each grade lowered by one grade.The maximum size of interest-bearing liabilities is increased by 5% for each lower grade,but capped at 15%.In this context,the real estate industry,which is highly dependent on banks for liquidity,faces the problem of controlling the size of liabilities,and the first priority is to solve the consequent liquidity problem.In this article,HD Group,a leader in the real estate industry,which has been controversial due to liquidity risk since three-red-line policy,is selected for case study.In this thesis,mainly by analyzing the data of HD Group’s published annual financial reports,in the measurement of liquidity risk using financial assets,the liquidity of HD Group’s financial assets totaled 703.727 billion yuan,which could only cover 46.69% of current liabilities;the cash flow gap of HD Group in 2020 reached 57.739 billion yuan,which was 1.8 times of the annual profit;by calculation,HD Group in 2020 current ratio of1.26,quick ratio of 0.33,cash ratio of 0.11,inventory turnover ratio of 0.28,and inventory sales period of 1,285 days,reflecting that HD Group has a large liquidity risk.By analyzing the measures taken by HD Group after the liquidity risk occurred,we found that selling equity is a more efficient way to replenish liquidity,followed by accelerating inventory consumption through marketing and reducing investors’ requests for repurchase through negotiation also play a good role in mitigating liquidity risk.In the analysis of the causes of liquidity risk of HD Group,it is found that the internal causes of liquidity of the group are mainly the strong demand for capital due to over diversification of the group,and secondly,the cash flow shortage due to the excessive payment of dividends by the company to its shareholders.In terms of external factor,HD Group’s liquidity risk was triggered by the ‘three red lines’ policy,which led to a bottleneck in capital replenishment.Therefore,in order to avoid large liquidity risks in Chinese real estate enterprises,real estate enterprises can reduce the demand for operating cash flow by focusing on their main business and avoiding excessive diversification;secondly,they should do a good job in liquidity management and optimize their business decision-making process so that they can be more targeted and scientific in capital management;finally,they should also do a good job in marketing;targeted information disclosure management for industry regulation so that the information can be fidelity and timely.Finally,the regulation of the industry should also do a good job in the management of targeted information disclosure so that the information can be transparent and timely,so as to facilitate the timely detection of corporate liquidity risk by all subjects to protect the interests of the people involved. |
