An Analysis On The Investment Value Of China Power International Development Limited

Benjamin Graham,"Father of the theory on value investment" firmly believes that:the stock market price fluctuations with a strong speculative(a moody's "Mr. Market"),but it seems bound to return to long-term fundamental values(that is,the company's assets and the real value of profitability).Buffett world's richest in 2008, is not only a loyal believer in the concept,but also the greatest practitioner.Warren Buffett said:"Graham's ideas,from now until 100 years later,it will always be the cornerstone of a rational investment."The theory on value investment is accepted windly.In this article,the author selects China Power(2380.HK) target for analysis.Hope to apply the knowledge learned during the MBA studying.After the analysis on the company's fundamentals, industry status,trends of development,enterprise development strategy and historical financial performance,we will try our best to predict the business performance of the company in the next future.On this basis,we calcualte the future business performance of China Power,and the WACC is estimated.Finally,after using company value theory and models,and the sensitivity analysis,we can have the shares of China Power for a reasonable price of about 2.02 Hong Kong Dollar. Compared with the price on the assessment date(March 31,2009),the value of the stock of China Power has been underestimated,it is recommended:to buy.