Based On Real Options Model Of High-tech Enterprises IPO Pricing

Along with the launch of GEM, a growing number of high-tech enterprises may be financed through capital markets, but there is no IPO pricing method fits for high-tech enterprise in our country, the estimated value of companies often deviate from the actual value. This paper attempts to use real options theory to IPO pricing on high-tech enterprises, combining the characteristics of high-tech enterprises ,through the establishment of high-tech enterprises pricing IPO model based on real option pricing ,we hope to reflect the real value of enterpriseThis paper introduces the definition, the value of characteristics and valuation difficulties of high-tech enterprises. Since high-tech enterprises has the characteristics of high investment and high risk, traditional IPO pricing methods have a great deal of defects among their pricing, This text has carried on deep analysis to this. Then three traditional IPO pricing methods : Discounted Cash Flow method, Comparable Approach and Asset-based Approach were studied and deficiencies of these three methods were drawn on high-tech enterprise IPO pricing: Discounted cash flow needs to predict the earnings accurately, while risky characteristic of high-tech enterprise determines that it is very difficult to predict future earnings; The Comparable Approach requires maturity comparable companies, and most high-tech enterprises are sunrise industries, it is difficult to find similar comparable companies; The Asset-based Approach, as most high-tech enterprise set up a short time and the accounting data of history are scarce, is also very difficult to be used, Through the analysis of real options theory, we find that its characteristics of flexibility, phased, uncertainty make it use in the fields such as R&D and project investment. These characteristics of real options coincided with the high investment, high risk, high return value features of high-tech enterprises, which possess feasibility on pricing IPO in high-tech enterprise on the basis of real option theory.Finally, the article studied the life cycle of high-tech enterprises, under the guidance of trigeminal tree model, combined with the previous findings of analysis, estimate the potential value of high-tech enterprises in a comprehensive and systematic way to reasonably assess the total value of the enterprise. On the basis of work above, we established IPO pricing model based on real option for high-tech enterprises, analyzed the model assumptions and parameter estimation and set the specific case of Kunming Pharmaceutical Corp. to test the model accuracy and feasibility. The model makes up the deficiencies of traditional IPO pricing model present a new interpretation of the high-tech enterprise IPO pricing, we hope to provide a new research direction theoretically, the high-tech enterprises of investors and managers have a guide and reference in practice.