Cash Flow Risk Management under Light-Asset Transformation: A Case Study of Guangzhou Pearl River Development Group

Abstract

As China's real estate sector adjusts, the traditional asset-heavy model has become harder to sustain because of high leverage, long
cash conversion cycles, and rising liquidity pressure. Using Guangzhou Pearl River Development Group as a case study, this paper examines
how light-asset transformation reshapes cash flow risk. Drawing on cash flow management, risk management, and capital structure theories,
the study develops a framework linking business restructuring, cash flow reallocation, and risk transmission. Pearl River's 2023 restructuring
shifted its core business from real estate development to property management and cultural and sports operations. The transformation reduced
leverage pressure and improved operating cash flow, but it also weakened collateral capacity, reduced revenue scale, and slowed receivables
collection. The findings indicate a risk path characterized by financing contraction, more selective investment, and gradual operating recovery.
The case further shows that lower capital intensity does not automatically eliminate financial vulnerability, but instead changes the channels
through which cash flow pressure emerges.