CNPC Corporate Value Analysis

CNPC is one of China’s most revenue company and one of the world’s largest oil companies.CNPC is the high-quality assets representative of the state-owned enterprises.State-owned enterprises are very important in our economy.In order to better evaluate the investment and management of the state-owned enterprises,the SASAC implement new "Performance Evaluation Provisional Measures" in 2010 and EVA economic value added indicators as an important indicator of performance evaluation was introduced.EVA,compared to other traditional accounting indicators,considers the opportunity cost and it has been widely recognized and accepted all over the world.This article mainly uses EVA valuation model method to discuss CNPC,which is the representative of the state-owned enterprises,performance and valuation creation in recent years.The article used two kinds of EVA valuation model to evaluate the corporate value of CNPC.The study found that calculated by the SASAC EVA method,in 2011--2015 EVA of CNPC were all higher than the average annual value of the standard EVA index.Further studies showed that SASAC announced EVA performance evaluation index is better than traditional accounting metrics but inferior to standard EVA index.Comparing the two different calculate method,it is found that the main difference is the cost of capital.SASAC EVA method is lower than the market expect value of CNPC.Article also assessed the company’s value using standard EVA valuation method.Compared with the price of the market,besides 2015,the trend of price-earnings ratio declined in line with the standard EVA valuation.The paper also found that the value deficit of CNPC is mainly due to operation inefficiencies and limited ability to create value.SASAC EVA evaluation can partly reflect these facts,but the effect is not as good as the standard EVA method.