A Theoretical Framework And Its Evaluation Index System On Market Value Management Of China's Listed Companies

With the smooth progress of split-share structure reform, China's capital market has entered into a time of full circulation, and the stock market has also experienced a sharp fall from soaring. The total A-share market value soared all the way from 3.1 trillion RMB in the end of year 2005 to 32.44 trillion RMB in October 2007, and then collapsed in 2008 to 12.14 trillion, causing an encountering"the largest market value shrinking year " in China's 18-year stock market history. In the face of such turbulent stock market, the micro listed company management, the moderate capital market governance, and the macro economic regulation are all in an urgent requirement of studying the market value management (MVM). Therefore, the market value and MVM came into being as an inevitable product of a full circulation time, and quickly became a hot topic in China's capital market. The market value has a profound impact on the governance of listed corporations, performance evaluation of management layers, acquisition and anti-acquisition capability, financing costs, the wealth of investors and even the measurement of a country's capital markets. Moreover, the proposal of MVM marks the further deepening of China's practice in listed company management, reflecting profound transformation in the philosophy and ideology of listed company operation--a change of business goal from profit maximization to value maximization; of enterprise management from profit-oriented to market value-oriented. Therefore, market value has become the new benchmark of capital market; the MVM has become a new task facing listed companies. Thus, the research on the MVM is of great theoretical and practical significance.This paper discusses the question of MVM from the standpoint of China's listed companies with an aim to create a more comprehensive framework for theoretical analysis. First of all, the market value is not simply the multiplication of stock price by the number of shares, but should also include intrinsic value and extrinsic value, of which the former is nature and the latter is the former's market performance; and the MVM is not the simple management of the stock prices, either, but should include the value creation, value realization and value operation. It is the performance evaluation of MVM that turns theory into practice. Therefore, on the basis of the existing MVM or value management evaluation index system, this article preliminarily constructs a more comprehensive evaluation index system through these five aspects—environmental indicators, value management, capital structure, relations among investors and the performance of market value. What's more, combining with the existing accounting statistical indicators, this article tentatively builds a more specific evaluation index system for practical operation, which is then applied in practical evaluation in order to conduct empirical analysis. Finally, this article reaches a conclusion after summarizing the full text and points out the direction of follow-up research.Market value manage is a management science and also a management practice requiring continuous innovation and constant improvement, an constantly growing art. It is believed that with the development of China's capital market, the theory and practice of MVM will pass through a way of constant innovation, improvement and maturation.