| The banking industry has always been one of the important forces promoting China’s economic construction and development. Over the years, China’s banking industry has been given full protection and support by the national finance. With the entry into the WTO in2001and the full liberalization of foreign banks at the end of2006, China’s banking industry has been facing unprecedented competition and challenges. As China has gradually opened up on the financial markets, ICBC, Construction Bank, Bank of China and Agricultural Bank of China have all completed a joint-stock reform, and have reconstructed and listed, and other commercial banks have also accelerated the pace of listing. With the continuous improvement of people’s living standards, the demand for banking financial services is gradually increasing. The growing proliferation of the needs for such banking businesses as personal loans, housing loans, bank cards, etc., China’s banking industry will enter a stage of rapid development in the near future. Opportunities coexist with challenges. How to improve the value of the bank itself, seeking to grow and develop in the increasingly competitive environment, is the main consideration for the banking industry of our country in the future.Up to now, there are16banks in China’s A-share market. All listed joint-stock commercial banks’management level was higher than the industry average, which shows that China’s banking industry has a good level of and great potential for development, and listed commercial banks now have become the leading force of the whole banking sector. For the majority of investors, they are more concerned about whether a bank has investment value. Academia has many methods for the judgment of business investment value, including the relative valuation method, the absolute valuation method and the economic value added method. This paper describes in detail the theory on as well as the advantages and disadvantages of each judging method for the investment value, and finally determines the use of economic value added method to analyze and judge the investment value of China’s listed banks.Selecting14Chinese listed commercial banks as examples, including ICBC, China Construction Bank, Bank of China, Agricultural Bank, Bank of Communications, Shanghai Pudong Development Bank, Minsheng Bank, China Merchants Bank, Huaxia Bank, Industrial Bank, China CITIC Bank, Bank of Beijing, Nanjing Bank and China Everbright Bank, the paper introduces the current development status of China’s banking industry, as well as the application of the EVA method among the commercial banks of our country. Moreover, by detailing the single-stage and the two-stage economic value added model formed based on the economic value added method as well as the method itself, the relevant economic indicators needing calculation are defined, of which the data are disclosed in the2010Annual Report of the banks, and stock-related data are taken from yahoo finance. The main part of this article describes the choice of banking EVA model, accounting adjustments based on the EVA, and explains the various indicators in detail. Then the two-stage EVA valuation model is used for the empirical analysis of the overall value of China’s listed banks, and appropriate policy recommendations for our banks to increase investment value are put forward. In2010, among the listed commercial banks of China, four stocks are undervalued, eight are overvalued, leaving two with the value basically consistent with their respective intrinsic price. |
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