Analysis of Financing Channels of Real Estate Companies in China

Abstract

With the continuous development of China's economy, the real estate industry plays an important role in it, which witnesses booming growth. However, with its rapid development, it has also brought great problems and challenges, such as blocked funding sources and high financing costs. Therefore, this article will study the financing channels of several listed real estate companies, China Fortune Land Development CO, Poly Development Co., Ltd. since 2014 to 2018, comparing and analyzing the financing channels of private and state-owned enterprises. By extracting information about funding costs and risks from financial and public debt information, the differences in WACC values, cash flow status, and debt structures under different companies' financing plans will be compared. Accordingly, this study investigated possible reasons of choices made by these two enterprises. Enterprise decision-makers still need to make sufficient understanding and weigh the pros and cons before making financing decisions and should not finance blindly. These results of this article have reference significance for the financing of future real estate companies.