Case Study Of Financial Risk Contagion In HNA Group

With the development of macro economy,the expansion of a-share market and the occurrence of m&a boom,the size of enterprises in the economic market has gradually expanded,forming Hengdian system,Complex galaxy,universal system,Zhongzhi system,Fangda system and other giant family groups.The capital family forms a large volume and relies on the complex equity relationship and transaction structure,which makes the enterprise group itself constitute a "system",and no member can completely avoid "systemic risk".Under the complicated capital operation of the family,the risk is transmitted among the member enterprises,and the member enterprises of the whole family build a complex risk transmission network.HNA Group did not deal with these problems well after falling into financial crisis,which eventually resulted in bond default,stock market decline and other problems,and caused a chain reaction among members of the group.Contagion is at work behind HNA’s debt default,which caused a chain reaction in the stock market.This thesis,with the help of such a system as HNA Group,analyzes how risks accumulate,infect and break out within the group.This thesis first introduces the case of HNA Group from three aspects: the development history of HNA Group,the equity structure of important sectors and the outbreak process of risk events.Secondly,it analyzes the solvency of HNA Group and finds that its long-term solvency is normal,while its short-term solvency is weak,and there is a capital gap,which leads to a liquidity crisis and exacerbates the liquidity crisis of HNA Group through risk contagion.Subsequently,the correlation between HNA Group’s equity market and bond market is modeled to observe the change of correlation coefficient before and after the outbreak of risk events and determine whether risk contagion occurs.Next,the Co Va R model is constructed and the net spillover matrix is generated through quantile regression of group companies in pairs.The net spillover matrix is modeled according to the maximum spanning tree model to obtain the risk contagion path of HNA Group.Finally,the causes of risk contagion within the group are analyzed and relevant conclusions are drawn.Based on the above research,this thesis finds that the risk contagion of HNA Group comes from its complex shareholding structure,related party transaction,related party guarantee relationship and the existence of internal capital market,and gives the following suggestions for the phenomenon of risk contagion within HNA Group: 1.Maintain investor confidence after the occurrence of crisis.2.Guard key nodes when crises occur.3.Control related guarantee within the group.4.The internal capital market should be efficiently allocated.5.Grasp group risks and optimize governance structure.This research is supported by National Natural Science Foundation of China(71940012).