Financial and Development Analysis of Y Architectural Design Company

Abstract

On 22 September 2022, UA Design, a privately listed design institute, announced that it intended to restructure its debt in the form of housing against debt with some real estate companies. Based on this event, this study collected and analyzed UA Design's financial data in an attempt to find out the reasons for the growth of its accounts receivable and to get a glimpse of the industry's development dilemma. The case study of UA Design and its associated real estate company, Greenland Holding Group Co., Ltd. reveals that the increase in accounts receivable is closely related to the liquidity risk of the real estate industry, which has been exposed to policy factors such as the three red lines. Various real estate companies are using deferred payment methods such as commercial paper to minimise the blockage of financing due to the touching of the "three red lines", which manifests itself at the design institute level in the form of defaulted design fees. In response to this situation, this study has accordingly made recommendations from the perspectives of human resources and technical management, and has proposed that policies such as the three red lines are beneficial to the long-term development of design institutes.