Research On Default Of DX Corporate Bonds

Bond market is an important part of China’s capital market.In recent years,with the continuous expansion of the scale of China’s bond market,credit risks are gradually exposed.In the context of slowing down of domestic macroeconomic growth,tightening of refinancing environment and tightening of credit supervision,the bond market has witnessed a wave of defaults and frequent defaults.As of December 2021,a total of 740 bonds in the credit bond market failed to pay interest or principal on time,involving 222 defaulters with a total default value of 691.008 billion yuan.Among them,191,155 and 145 bonds defaulted from 2019 to 2021 respectively,and the overall default situation was relatively serious.Bond default has a wide range of influence,which not only damages the interests of the majority of creditors,affects the credit rating of defaulting enterprises,increases the financing difficulty of enterprises,but also disturbs the smooth operation of China’s bond market and seriously hinders the long-term healthy development of the bond market.By analyzing the specific cases of bond default,this paper studies the causes of default and risk prevention measures,which has important theoretical and practical significance for protecting the interests of creditors,reducing the risk of corporate bond default,reducing the possibility of default,and promoting the sustainable and healthy development of China’s bond market.This paper mainly adopts the case study method and selects DX Company,which has the largest proportion of bond default amount of private listed companies in 2019,as the research object.The company has experienced bond defaults for three consecutive years from 2019 to 2021,with concentrated default time and large default amount,which has good representativeness.This paper collected and sorted out the relevant domestic and foreign research literature,and clarified the theoretical basis.On the basis of referring to the relevant research results,this paper makes an in-depth analysis of the default of DX corporate bonds,analyzes the causes of default of DX corporate bonds from the external factors and internal factors,and puts forward targeted risk prevention suggestions.The research finds that :(1)the external reasons for the bond default of DX company include two aspects.First,the refinancing environment is tightened,the financing channels of the company are narrowed,and the inflow of new external funds is greatly reduced,which intensifies the bond default risk.Second,the macroeconomic downturn,the industry market demand growth is weak,fierce competition,photoelectric display industry profit space is constantly being squeezed.(2)The internal reasons for the bond default of DX Company include six aspects: the company’s aggressive strategic expansion,the performance of new investment areas is not up to expectations,and the investment efficiency is low;Short debt and long investment,debt repayment term and the use of funds do not match,the financing structure is unreasonable,short-term debt repayment pressure;The corporate governance is defective,the internal capital control system is not perfect,the execution is not in place,the major shareholders through the associated financial companies to occupy the enterprise capital problem is serious;Insufficient investment in R&D,weak core competitiveness and weak profitability;Accounts receivable management level is low,slow turnover,weak liquidity,seriously affect the cash flow of enterprises.Generally speaking,the enterprise financial situation deteriorates,the liquidity is poor,the financial risk is high.Based on the above research results,this paper puts forward the following suggestions :(1)enterprises should steadily promote the strategic layout of diversification and avoid radical expansion.(2)Give full consideration to the matching of financing and investment maturity,timely adjust the financing structure,broaden financing channels and reduce default risk.(3)Strengthen corporate internal governance,improve the internal capital control system,and restrict the behavior of major shareholders.(4)Increase investment in RESEARCH and development,improve core competitiveness of enterprises,and enhance profitability.(5)Strengthen the management level of accounts receivable,improve the turnover rate of accounts receivable,speed up the collection of funds(6)establish a financial early warning mechanism,dynamic monitoring of default risk.