New City Holdings Supply Chain Finance Asset Securitization Motivation And Effect Analysis

The real estate industry has a large demand for capital and a slow turnover of capital,and the raising of capital is an important factor affecting the development of real estate enterprises.However,in order to prevent the disorderly expansion of the real estate industry,the state has reformed the relevant system and restricted the financing of real estate enterprises by drawing the "three red lines",which makes real estate enterprises unable to obtain sufficient bank loans as before,and they are under great capital pressure.Supply chain finance asset securitization combines the characteristics of supply chain finance and asset securitization,and with its unique advantages,it can help real estate enterprises to relieve the pressure.This paper firstly introduces the basic information,financing situation and industry background of New City Holdings,analyzes its product issuance in recent years,and selects a landmark product by considering the representativeness and data availability of the product,and analyzes it from several perspectives of asset pool,participants and transaction structure.At the same time,we analyze the motivation of Xincheng Holdings to issue such products with case studies.Then,we further analyze the effect of securitization of supply chain finance assets of New City Holdings.Firstly,we use financial indicators to evaluate the changes of profitability,operating capacity and solvency of New City Holdings before and after adopting this financing method,and secondly,we use EVA model and Z-score model to evaluate the economic value added and financial risk status of New City Holdings before and after adopting this financing method.Finally,the possible risks in the practical application of this financing method are discussed,and relevant suggestions are made on how to further promote the development of supply chain finance asset securitization of real estate enterprises.Through the analysis,the following conclusions are drawn:(1)the securitization of supply chain finance assets can achieve disguised financing without taking up the loan amount,bridging the financing gap of enterprises,which can,to a certain extent,improve the profitability,operating capacity and long-term debt servicing capacity of enterprises;(2)due to the low financing cost,this model can reduce the financial expenses and improve the net operating profit after tax,which can,to a certain extent,improve the economic value added of enterprises;(3)due to the low financing cost,this model can reduce the financial expenses and improve the(3)this model can extend the payment cycle of enterprises,replenish their liquidity,reduce their financial risks to a certain extent,and thus improve their stability;(4)this method has the characteristics of storage shelf issuance,which can help enterprises regulate the rhythm of accounts payable payments,distribute the accounts payable to be paid evenly in various time periods,and reduce the pressure of centralized payment;(5)This method involves many participating entities,and in the process of cooperation,it can integrate the resources of the supply chain and customers and enhance the industry competitiveness of enterprises.However,there may be interest rate risk,operational risk and partner risk in the actual application of this method.Based on this,enterprises can avoid certain risks by enhancing business diversification,improving internal management,introducing blockchain technology and strictly selecting partners,so that this financing mode can better serve enterprises.At present,the state is actively promoting the development of supply chain finance asset securitization,however,this financing model is still immature in China,and the related theory and practice are still not perfect.In this paper,we choose New City Holdings,which is an early starter in the securitization of supply chain finance assets,and analyze the motivation and effect of this financing model from actual cases,and put forward some countermeasures and suggestions for it.On the one hand,it can provide some reference for other real estate enterprises to carry out this financing mode and relieve the capital pressure of real estate enterprises;on the other hand,it also helps to improve the research system of supply chain finance asset securitization and enrich the related theories.