| After 2013,social capital can participate in the construction and operation of cities by obtaining franchises,which means that the PPP model has officially begun to be implemented in China.PPP model can effectively reduce the financial burden of local governments,promote the rational allocation of resources,so it has been favored by local governments,PPP model has gradually been widely used in many industries,more and more enterprises want to participate in PPP projects,so as to improve corporate profits and competitiveness.However,the development period of China’s PPP model is shorter than that of foreign countries,and the theoretical level and practical application are still immature,and many problems have arisen,so after 2017,the state cleaned up many bad PPP projects to rectify the PPP project market,and more enterprises that blindly participated in PPP projects faced the risk of capital chain rupture or even bankruptcy because of project withdrawal,and the financial risks in the process of participating in PPP projects were gradually revealed.Therefore,how to prevent and control financial risks in the process of participating in PPP projects is an urgent problem to be solved.However,the construction industry is more inclined to choose the PPP model to carry out business due to the construction of new urbanization,in order to transform and upgrade enterprises from a single construction party to a comprehensive contractor.Therefore,this thesis takes China Fortune Land Development,a representative of the real estate industry,as an example,to explain the internal and external motivations of its participation in PPP projects and the overall overview of participating in PPP projects,and further analyzes a series of financial risks arising from China Fortune Land Development in the process of rapid expansion using the PPP model.These financial risks mainly include investment risk,financing risk and capital recovery risk,this article analyzes the reasons for these three risks in detail,and finally discusses how China Fortune Land Development can prevent and control financial risks in the process of participating in PPP projects in the future,so as to provide reference for other enterprises in the same industry.On the basis of combing the relevant literature at home and abroad,this thesis combines the theories of public goods,risk appetite,capital structure and risk management,takes the listed company China Fortune Land Development as the research object,and uses the literature research method,case analysis method and quantitative and qualitative methods to analyze and study the financial risks,causes and preventive measures of financial risks.This thesis first introduces the company’s equity structure,business classification and PPP projects in recent years,and analyzes the motivation of enterprises to participate in PPP projects from the internal and external levels,mainly due to the strong support of government policies and the internal development needs of enterprises.Then,the investment risk,financing risk and capital recovery risk faced by China Fortune Land Development are identified from the qualitative and quantitative levels,and the Z-score model and F-score model are used to support them,among which the investment risks mainly include the risk that the investment return is lower than expected and the risk of industrial chain integration after investment.Financing risks include large debt scale,unreasonable financing term structure and high financing costs;The risks of capital recovery include low accounts receivable turnover,slow inventory turnover and low total asset turnover.Through the analysis of the internal and external environment of China Fortune Land Development,this thesis believes that the factors arising from the financial risks of China Fortune Land Development mainly include the characteristics of the PPP model,the financing strategy used by the company,and the macro environment.Based on the analysis of the previous article,this thesis proposes corresponding preventive measures for different types of financial risks from the perspective of multiple subjects.First,management needs to improve its own risk awareness,avoid blindly participating in PPP projects,and screen high-quality projects to prevent investment risks.Second,enterprises need to adjust the financing structure and reduce the behavior of "short-term debt and long-term investment",financial institutions should innovate financial products to provide financial protection,and work with enterprises to jointly prevent financing risks.Third,when screening PPP projects,enterprises need to comprehensively consider the government’s solvency,strengthen their own accounts receivable management,and improve project profitability to prevent the risk of capital recovery. |
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