Research On ST Huaying Financial Risk Warning From The Perspective Of Life Cycle

Agricultural listed companies are the foundation of China’s agricultural development,the leader of agricultural and rural modernization,and the main force in achieving rural revitalization.In recent years,the government has introduced a series of policies and measures to support agricultural enterprises to become bigger and stronger,and to support eligible agricultural enterprises to go public through financing.However,only a few agricultural enterprises have been able to successfully go public in the end,and already listed enterprises have also experienced financial fraud,being ST or forced to delist.The reasons for the problems are multifaceted,and one of the main reasons is that agricultural listed companies lack awareness of financial risks,lack awareness of risk management,and have not established an effective financial warning system.ST Huaying was once a leading company in China’s duck industry and the largest duck processing enterprise in the world at that time.Even though it suffered losses in 2013,it quickly turned into profit.However,now it is facing huge losses,funding shortages,and financial difficulties caused by ST.This article takes ST Huaying as the research object.After analyzing its industry background and financial situation,it is found that it needs to establish a financial warning system as soon as possible,identify the sources of financial risks,and take effective measures to quickly overcome the financial crisis.On the basis of reading a large amount of literature and learning relevant theories,this article found that a single financial warning model cannot accurately predict the occurrence of two financial crises in ST Huaying.Therefore,the cash flow method was used to divide the development process of ST Huaying into three parts: the initial growth period,the mature period,and the decline period,and to construct three financial warning models for each period.This article first summarizes the methods of financial early warning,and summarizes relevant theories such as enterprise lifecycle theory,principal-agent theory,and contingency management theory;Then,a simple analysis was conducted on the industry background,development history,and financial situation of ST Huaying;Afterwards,the life cycle theory was introduced into the construction of financial warning models.The financial data of 21 startup and growth stage agricultural listed companies,as well as 18 mature and 9 declining stage agricultural listed companies,were used as samples for empirical analysis using principal component analysis and Cox regression models.A financial warning model suitable for three stages of agricultural listed companies was obtained,which was verified to have high accuracy;In addition,applying the model to ST Huaying China,it was found that the model successfully predicted two financial crises and analyzed the sources of corporate financial risks.It was found that the impact of indicators varies at different lifecycle stages.The financial crisis that occurs during the growth period mainly comes from external factors such as the "dead duck" scandal and avian influenza,as well as problems caused by insufficient business and profitability;In addition to the impact of the COVID-19,the reasons for the financial crisis in the mature period also include ST Huaying’s own problems of unstable capital structure,low product capacity and shareholders’ occupation of operating funds.The conclusion is that the combined effect of poor overall operating environment and poor corporate characteristics has led to the company falling into financial crisis.Finally,based on the actual situation,relevant policy recommendations are provided from four aspects: establishing financial and early warning mechanisms,strengthening internal governance,innovating financing channels,and improving product quality.