Research On Investment Value Of Listed Shipping Company Under Market Volatility

Shipping industry is a typical cyclical industry. The periodic fluctuation of the shipping market has greatly influenced the business of shipping companies. Enterprise operating performance is often cyclical changes. There are some mainly methods to evaluate enterprise, but cannot evaluate shipping company exactly. Thus, it's necessary to find the intrinsic value of the shipping company-unique evaluation method. It will provide managers more detailed and accurate references, let them know the value and existence of their own problems, then make the right management decisions to avoid market fluctuations. And it's conducive to investors and creditors to understand more clearly the operation of the company, provide the scientific basis for investment decisions.It is the most important and first step to find out law of shipping market fluctuation. Baltic Dry Index is a comprehensive reflection of shipping market. Analyzed the data over the past year, find the law of fluctuation and get its cycles. There are some existing valuation methods, such as the absolute valuation, relative valuation techniques and comprehensive evaluation. Compared these methods and analyzed their applicability for shipping company. The most appropriate method is comprehensive evaluation. The intrinsic value is determined by the cash flow. Shipping enterprises can ensure sustainable cash flow, depending on the current and future cash flows creativity. Selected 14 indicators established a comprehensive evaluation index system, found main factors that impact the operating results by factor analysis, sorted all the companies by factor score to judge the initial investment value of the company. Due to market volatility, the operating performance of shipping companies in different years is quite different. Some were synchronized with the trend of market volatility; some always showed a rising trend. Therefore, select a cycle of market volatility (4 years) composite score of each factor of the year to cluster, make a comprehensive evaluation, and ultimately determine the investment value of companies. The results show that:profitability, risk-resisting ability, asset management, capital expansion, and innovation capability are the main factors which affect the investment value of listed companies in the shipping industry. Only those have outstanding performance in all aspects are the most valuable. The ability of any one is too poor, will seriously affect the intrinsic value. The shipping market fluctuations cycle is four years, the performance of companies operating in different years vary. The investors could make the right investment decisions only by analysis and compare the results of operations in different years.