The Investment Value Analysis Of FAW CAR Co., Ltd

The stock market rational investment receives the general investors' esteem, impelling the development of the listed company's investment analysis.How to analyze the listed company relates to the success or failure of the investors' investment, therefore people continuously explore effective analysis pattern. This article unifies the traditional financial analysis with the industry analysis and the company competitive advantage analysis to carry on the investment value analysis . The purpose is to help the user to understand the enterprise finance and the management condition, at the same time to provide the effective pattern of investment value analysis for other which may refer to. First,through the car industry analysis, might know that the country is tightened the money market, enhancing the vehicle loan threshold, rising the oil price as well as the factory's stock and so on.Because of all the disadvantage factor , it is quite difficult for the market to restore to 2004 before. But looking for the future, the chinese macroscopic economy still could be in "the speedway", the chinese car industry growing with steady steps could not stop. Second,carry on the competitive advantage analysis. Its management and service ability are strong, its core product: Red Flag car and the MaZda car have a certain competitive ability, but its competitive power more depend on the new vehicle type. Therefore, must pay attention to the risk of its sole product. Third,using the comparison analytic method and the tendency analytic method to analyze three financial statements of FAW CAR Co., Ltd.. Through the asset analysis, may know that the current asset hold the great proportion in the total asset, It explains that FAW CAR Co., Ltd. has strong payment ability and good asset elasticity, the asset structure trend is reasonable. The high current asset may reduce the debt risk, but reduce asset profitability actually; Through liabilities analysis, It indicates that in the financial combination ,administrative personnel morely use the short-term fund , little use the long-term fund. Under this kind of combination, company's fund cost is low,thus may increase the profit, but the company may undertake the big risk ,because of without enough cash current to repay a debt in the short-term ; Through ownership analysis, may know the investment still is the main origin; The main reason which the ownership grew largely is that the earnings reserve and undistributed profit increased considerably. Through the income statement analysis, knowing that FAW CAR Co., Ltd. has experienced three stages:1997 -2001 is slowly glided down, 2001 -2003 is fast period of expansion, 2003 -2004 is adjustment period. In 2004 ,its main business income grew slowly than the cost and the expense rate,which caused the net profit increment rate reducing directly. Through the cash flow statement analysis ,knowing that, in 2004 each cash current is negative, company's cash ability glides down, which should cause the investors to pay attention to. Fourth,carring on the ratio analysis . Through contrasting the same industry average value , draw the conclusion: This company has strong ability to pay off a debt ; The company profit ability in 2004 drops with the whole market, but still was the middle and upper level in the same industry; Because of the long period of receivable bill, which causes the turnover speed of its current assets and the total property to reach the average value, its operating ability is ordinary. Its shi-ying-ratio is somewhat low and the stock price is underestimated, it has market investment value, the investor may carry on the suitable investment involvement. Fifth,utilizing the Dupont analytic method, carry on the comprehensive financial analysis and draw the conclusion: The main reason of the net assets returns ratio droped is that the property use or the cost control has problems. one is that the market and management expense increase largely,which causes the cost increase and the net profit reduction. Two is that the net profit rising rate is smaller than by far the sales income rising rate ,which causes the sales net profit rate droplargely. Through above analysis, the author proposes the improvement in view of management : One, uses the advanced management pattern, raises the inventory management level; Two is to reasonably utilize finance leverage, it is advantageous to profit growth; Three, strengthens the expense control, raises the profit level; Four, increases the research and development ability and promots the core competitive power. Giving the investment suggestion to the investors:Under the car industry murky influence, the profit ability is dropped very quickly, the profit rising space is small, so gives "the neutrality" valuation to FAW CAR Co., Ltd..