1.What are the risks of HNA development strategy?

Excessive financial leverage. HNA has successively acquired many industries unrelated to its main business, such as hotels and finance, and occupied a lot of funds, most of which came from bank loans. It is a typical leveraged buyout, resulting in a lot of liabilities. However, M&A's shares are not enough for HNA to enter the decision-making level of M&A enterprises, and the profit return rate is low, and M&A resources cannot be fully utilized and integrated, resulting in excessive financial leverage, unreasonable matching of capital maturity and inability to repay debts in a short period of time.

The asset-liability ratio is too high. Through the balance sheet and income statement in recent years, it can be seen that its asset-liability ratio is much higher than that of its peers, and there has been a serious shortage of cash flow, which makes it impossible to repay debts in time. Deviation of various financial indicators, low efficiency of asset turnover, decline in operational capacity and operational difficulties are all manifestations of financial risks. In order to make up for the loss, we have to refinance with huge leverage to ensure the normal operation of the company.

The expansion speed is too fast. The capital chain is the first impact of rapid expansion. At the same time, because many M&A businesses are not closely related to the main business, they use the same investment decisions and strategies to engage in businesses in different industries, resulting in cross-industry M&A risks much higher than those in the same industry. To diversify, we must have a diversified strategy that matches it. HNA is deficient in the layout and optimization of diversification strategy.

Internal control is unfavorable. Behind the crazy expansion of HNA is the extremely high debt ratio, which is facing serious financial risks. Enterprises fail to timely and effectively warn and provide financial risk assessment and feedback to decision makers, and can not be solved in time through internal control system. The current financial situation shows the disadvantages of its internal control system and internal process optimization.

Lack of effective integration of existing resources. Enterprises need to deeply analyze whether the resource allocation within the organization is consistent with the strategy, and optimize the core process and allocate related resources according to the strategic needs and the problems existing in the current process, so as to achieve the overall optimal level of resource allocation of the organization and effectively support the enterprise strategy. HNA has not effectively integrated existing resources and purchased resources while expanding rapidly, and pure asset growth has not played a better role in the good experience of enterprises.

Large-scale strategic restructuring plan. At the beginning of development, due to the obvious weakness in competition, a series of large-scale cross-regional mergers and acquisitions beyond their own strength were carried out to quickly enhance the status of enterprises. However, due to the large scale of mergers and acquisitions, HNA owes a huge debt of more than 2 billion yuan. With the severe damage caused by the SARS epidemic to the aviation industry, the industry quickly fell into a freezing period.

Failure of internal financial decision-making mechanism. Any decision of an enterprise should be guided by the financial decision-making mechanism, and the behavior of top managers should be effectively supervised and restricted to ensure the scientific decision-making. However, HNA blindly carries out activities such as investment and mergers and acquisitions, and the probability of financial risks is greatly increased.

Weak risk awareness. Due to the unreasonable capital structure of HNA and the use of debt financing, decision makers failed to fully realize the financial strength and solvency of enterprises, failed to predict and evaluate the risk of capital use in time, and lacked scientific budget management, which led to the rapid expansion of its value loss.

Reasonable control to reduce financial risks

Establish a reasonable capital structure. Enterprises need to broaden the channels and ways of raising funds and arrange enterprise funds reasonably; Different financing schemes can be adopted according to the scale characteristics and different development stages to reduce costs and improve the ability of sustainable development. At the same time, we should increase capital gains, promote the stability of capital structure, rationally arrange capital management from the actual situation of our own production and operation, carry out system and management innovation, reduce risks, and improve the utilization rate and turnover rate of enterprise funds.

Raise awareness of risk prevention. In order to improve the efficiency of financial risk management, enterprises need the participation and support of all employees, so that the awareness of risk prevention of enterprises can play its role to the maximum extent and the system established by enterprises can have a strong support point. Due to the complex hierarchical structure, enterprises will lead to complex equity division and easy management confusion. If the superior and subordinate can't effectively manage and coordinate, financial risks may break out.

Strengthen macro-environmental analysis. Large-scale enterprises have diversified and international development goals, which is undoubtedly inseparable from the analysis of the macro environment, and it is precisely because of the influence of macro factors that financial crisis will occur. Therefore, it is the primary task of enterprise's sustainable development to do a good job in external environment analysis, find out the factors that are not conducive to enterprise's development in time, formulate scientific preventive measures and coping strategies, and reduce the impact of external environment on enterprises.

Regardless of the size of the enterprise, we should pay enough attention to financial risks and control them through scientific methods, improve financial risk awareness, strengthen the construction of financial decision-making mechanism, and enhance the effectiveness of strategic decision-making, so as to promote the sustainable development of enterprises.