Research On The Value Evaluation Of Minsheng Bank Based On Equity Cash Flow Discount Model

In twenty-first century, economic globalization has become an irresistible trend. In this context, the financial industry has occupied a pivotal position in the field of modern economy. It has become an important support for the country’s political and military power, and the banking industry is the most important of the financial industry. Along with the development of economy in China, both domestic and international capital market are facing a growing competitive situation, especially in commercial banks. In recent years, the M & A transactions of commercial banks, the reorganization of assets and other economic activities have become increasingly frequent and widespread. Therefore, the study of assessing and pricing the equity value of commercial banks fairly as well as reasonably has noteworthy practical significance.The research of enterprise value evaluation dates further back in the western capitalist countries, but it starts late in our country, so the evaluation of enterprise value in China is mostly based on the theory and practice of the West. Discounted cash flow method is one of the most widely accepted methods to assess the value of enterprises in the western countries, which is highly praised in the market of capitalism, while it is applied few in our country. The reason is that the capital market of China starts late, develops slowly, and the market is not healthy and mature enough. In recent years, China’s economy develops rapidly, so the capital market are improving too. In this context, it is necessary to discuss the applicability of the cash flow discount method in China. Minsheng Bank, as the first private commercial bank in China, focuses on private enterprises, small as well as micro enterprises and high-end customers, its development path and mode are representative and referential in the banking industry. Therefore, it was chosen by us as the research object. Through the analysis, we conclude that the Minsheng Bank’s share is reasonable in the stock market, and it has good financial situation and long-term investment value. Therefore, the equity cash flow discount model has feasibility and practical significance in the evaluation of commercial banks. It also shows that investors in the capital market become more rational, and the market efficiency is obviously improved and enhanced.The thesis is composed of five parts. The first part is the introduction. The second part mainly introduces the theory and method of enterprise value evaluation, including the characteristics and basic contents of the three kinds of evaluation methods and other enterprise valuation methods. The third part is the analysis of the particularity of the value evaluation of commercial banks, mainly analyzes the characteristics of commercial banks, the profit model, the difficulty of the evaluation, the internal and external influence factors of value creation. In the fourth part, we appraise the value of Minsheng Bank based on the discounted cash flow model, and we also analyze its basic situation as well as the financial situation. The fifth part is conclusion and reflection.