Credit risk analysis of Chinese companies by applying the CAFÉ Approach

Yuan, G. X., Yan, C., Zhou, Y., Liu, H., Qian, G. and Shi, Y. (2022) Credit risk analysis of Chinese companies by applying the CAFÉ Approach. In: Wang, Y., Zhu, G., Han, Q., Zhang, L., Song, X. and Lu, Z. (eds.) Data Science: 8th International Conference of Pioneering Computer Scientists, Engineers and Educators, ICPCSEE 2022, Chengdu, China, August 19–22, 2022, Proceedings, Part II. Series: Communications in computer and information science (1629). Springer: Singapore, pp. 475-502. ISBN 9789811952081 (doi: 10.1007/978-981-19-5209-8_33)

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Abstract

It is known that the current Credit Rating in financial markets of China is facing at least three problems: 1) the rating is falsely high; 2) the differentiation of credit rating is insufficient; and 3) the poor performance of predicting early warning, thus we must consider how to create a reasonable new credit risk analysis approach to deal with issues for financial markets in China for those listed companies’ performance. This report shows that by using a new method called the “Hologram approach” as a tool, we are able to establish a so-called “CAFÉ Risk Analysis System” (in short, “CAFÉ Approach”, or “CAFÉ”) to resolve three issues for credit rating in China. In particular, the main goal in this paper is to give a comprehensive report for credit risk assessments for eight selected list companies by applying our “CAFÉ” from different industry sectors against actual market performance with the time period from the past one to three years through our one-by-one interpretation for event screening and true occurrence and related events. In this way, we show how “CAFÉ” is able to resolve current three major problems of “rating is falsely high, the differentiation of credit rating grades is insufficient, and the poor performance of predicting early warning” in the current credit market in China’s financial industry in practice.

Item Type:Book Sections
Status:Published
Glasgow Author(s) Enlighten ID:Shi, Dr Yukun
Authors: Yuan, G. X., Yan, C., Zhou, Y., Liu, H., Qian, G., and Shi, Y.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Publisher:Springer
ISBN:9789811952081
Published Online:10 August 2022

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