[Keywords:] real estate companies; Financial risk; Control mode; asset structure
[China Library Classification Number] F275 [Document Identification Number] A [Document Number]1005-6432 (2012) 31-0092-02
1 financial risk characteristics of real estate enterprises
First, the lower capital turnover rate. The project development of real estate enterprises is divided into four links: land acquisition, land development, housing development, completed sales and property management. Each of these four links needs to consume a lot of money, and only housing enterprises with pre-sale permission can implement pre-sale in the third link, thus recovering part of the funds. In addition, the inherent characteristics of high real estate value make most buyers choose installment payment, which slows down the speed of capital recovery. The capital recovery period of many enterprises is even as long as ten to twenty years, which makes many enterprises face the financing pressure that cannot be underestimated.
Second, excessive use of financial leverage. Real estate enterprises often choose loans to meet a large amount of capital demand for real estate development, and its direct consequence is excessive use of financial leverage and high asset-liability ratio. Financial leverage is actually a double-edged sword: its advantage lies in that the company has a large amount of disposable funds under the condition of less free capital; The disadvantage is that high financial leverage will produce greater liquidity risk, which will easily bring strong repayment pressure to enterprises and bring instability to the return on shareholders' equity.
Third, the asset maturity mismatch. Most real estate enterprises mainly rely on borrowing. This business model requires the company to have high liquidity, and the company's own assets must match its borrowing amount, otherwise it will easily lead to the risk of capital shortage. Inventory is the main current assets of real estate enterprises, which can be divided into developed products and non-developed products. If further subdivided, real estate development products can be divided into land to be developed, development products under construction, completed commercial housing and leased development products, while non-development products cover raw materials, inventory goods and low-value consumables. For example, Vanke's annual report shows that its inventory in 2008 accounted for 76% of current assets. Poor liquidity and difficult realization are the main characteristics of inventory in this industry, which leads to low matching degree between current liabilities and current assets and great debt repayment pressure.
Fourth, the unbalanced cash inflow period. Good cash flow is an important guarantee for the normal operation of the company, but many listed real estate enterprises have unstable cash every year. One of the reasons for the instability of cash flow is that many real estate enterprises use pre-sale to obtain liquidity in advance, but ignore the matching of the sales period and pre-sale period of each project, resulting in the cash flow of main business rising year by year and falling year by year. The second reason is that the cash flow of the company's investment income is also unbalanced. Cash redundancy and short-term risk of debt will appear alternately with the change of cash inflow. In the long-term operation, the proportion of cash interest guarantee cannot be guaranteed.
Fifth, the project adjustment ability is weak. The development cycle of several years or even decades makes many projects have huge investment and long management cycle, which is not conducive to the timely adjustment of real estate project implementation plan. Once the funds are invested in the project, it will increase the cash outflow. There are many uncertainties in the long-term development cycle. Once a certain factor causes the project to be forced to stop, the possibility of cash flow will be reduced, the invested funds will not be recovered, and the daily operation of the company will be hindered.
Sixth, the key to the development of real estate enterprises comes from land reserve. In recent years, land appreciation has become the main driving force to improve the profit level of real estate enterprises. In a market that hasn't changed much, whether a company gains profits depends on its ability to acquire land. Therefore, the competitiveness of real estate companies is reflected in the amount of land reserves, and the main consideration of the market value of real estate companies becomes the quantity and quality of land owned.
2 real estate enterprises in the financial risk management problems
First, the asset-liability ratio is too high. Large investment scale is the main feature of real estate company projects, and it is difficult for self-owned funds to meet such huge capital demand at one time. In this case, many real estate companies will turn to banks for loan support. Huge loans will help real estate enterprises tide over the difficulties, increase risk of debt, and a real estate industry with high debt ratio and excessive financial risks will be born.
Second, the poor liquidity of assets leads to greater debt repayment pressure in the real estate industry. Because real estate inventory is the main current assets of real estate companies, these inventories have poor liquidity and long liquidation period, and most real estate companies have many debts with different maturities to repay. The company may be able to use long-term sales to repay the corresponding long-term debts, but it is difficult to raise the funds needed to meet the short-term debts in a short time. This easy-to-happen short-term shortage of funds brings great financial risks to real estate enterprises.
Third, the enclosure phenomenon is serious. The main production resource of real estate project development is land, and the quantity and quality of land have a direct and significant impact on the company's performance in the market and industry. Just like this, the phenomenon of "enclosure" is extremely serious in the real estate industry, and its opportunity cost seriously affects the efficiency of capital utilization. After calculating the land value-added tax, the high tax policy will hit the "low-cost land acquisition" strategy that real estate companies have been pursuing.
Fourth, the profitability of the main business of real estate companies is being eroded by diversified blind investment. Diversified investment has always been regarded as the main strategy for China real estate enterprises to guard against the financial crisis. However, many companies have made immature diversified investment behaviors without fully studying and deploying their own conditions, conditions and investment industry conditions. This kind of blind behavior can not only bring the company full profits and necessary protection, but also drag down the company's existing main business, offset the profits of the main business, and bring a lot of financial management troubles to the development of real estate business.
Fifth, the corporate governance structure of many companies is not perfect. The improvement of the internal governance structure of real estate enterprises in China basically stays in the form, but it lacks effectiveness in the actual application process, and the supervision system is in an extremely dangerous vacuum. There will also be a series of unnecessary management problems, for example, it is difficult for the company's management to make the most suitable decision for the company's development based entirely on the company's interests.
3 Prevention of financial risks
3. 1 Main means to prevent financial risks
(1) dispersion method. As the name implies, enterprises can disperse existing risks through changes in business methods. On the one hand, real estate development enterprises can cooperate with other enterprises to develop projects with large capital demand and high investment risk, and promote the development of enterprises on the premise of reducing their financial risks; On the other hand, enterprises can put existing funds into different kinds of projects to prevent a unsalable project from dragging down the operation of the whole enterprise, realize diversification of investment and avoid risks to a certain extent.