SIGNATURE WORK
CONFERENCE & EXHIBITION 2024

This study undertakes a comprehensive analysis of bankruptcy risks in the Chinese real estate sector, blending traditional models and modern statistical methods to identify key factors influencing bankruptcy risk. The research findings highlight a significant disparity in financial performance, as demonstrated by the Net Profit Margin and ‘Net profit margin of total assets excluding minority shareholder gains and losses,’ confirming the hypothesis that certain financial indicators are pivotal for bankruptcy prediction. The study also critically assesses the Altman Z-Score Model, revealing its limitations due to the unique aspects of China’s real estate market, such as prevalent debt financing and specific national policies. This necessitates a localized approach to bankruptcy risk assessment, advocating for customized models that accurately mirror the sector’s financial landscape. Furthermore, the logistic regression analysis refines the bankruptcy prediction model, achieving high accuracy in distinguishing between high-risk and low-risk companies, supported by performance metrics like accuracy, precision, recall, and F1-score. This research enriches academic discussions on bankruptcy prediction and offers valuable insights for real estate sector stakeholders, emphasizing the importance of adapting models to local market dynamics for enhanced risk assessment. Ultimately, it advocates for a nuanced, data-informed approach to bankruptcy risk analysis.