Value Estimation Of Depreciatory New Stocks Gao Meng Xin Cai

The phenomena of depreciatory new stocks was very common in2011. The preliminaryresearch indicated that the major reason of depreciatory new stocks was the overestimation ofthe issue price. We explored the influence of overestimation of issue price on the value oflong-term investment by analyzing Gao Meng Xin Cai, one of the depreciatory new stocks inchemical industry. The research is composed of both theory of stock value estimation andanalysis of Gao Meng Xin Cai, including situation in the industry, finance, management andvalue estimation of the company. The theory of stock value estimation includes relative valuevaluation method (P/E model and P/B model) and absolute value valuation method(Discounted cash flow model and capital asset pricing model). Planimetric rectangularcoordinates, which was produced by unfolding traditional radar map, was used to depict thewhole financial situation more directly. DuPont financial analysis method was adopted toanalyze the financial statement. Evaluate the finance and management of the company andfinally estimate the value of the company using reasonable estimation theory. Conclusion: themanagement of Gao Meng Xin Cai, a depreciatory new stock, is good, but its fund is ultra-collected, leading to overestimated value of the enterprise.