Analysis of Solvency of A-Share Listed Companies in China’s Real Estate Industry

Hu Hongxia(School of Management, Shandong University of Technology)
Wang Yuting(School of Management, Shandong University of Technology)

Abstract

The real estate industry is a capital-intensive industry and capital has become a particular concern for real estate enterprises. For a long time, China’s real estate enterprises rely on high-leverage development and carry out high-debt and high-risk operations. The solvency of real estate enterprises has been the focus of stakeholders’ attention. In August 2020, China’s regulatory authorities introduced new financing regulations for real estate enterprises. They set up “three red lines,” which brought real estate enterprises’ solvency into focus once again. This article takes A-share listed companies in China’s real estate industry as an example, analyzes and evaluates its debt solvency, and gives suggestions based on new policies and regulations, hoping to provide specific references to the enterpriser’s manager and external decision-makers.

Keywords

Analysis of solvency; Assets and liabilities; Real estate industry; New financing regulations

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DOI: http://dx.doi.org/10.26549/jfr.v5i2.6997