Valuation Of Chinese Listed Companies In Iron And Steel Industry

In recent years, Chinese steel industry has drawn immerse attentionfrom investors, but is often considered to be too risky and having excesscapacity and backward production facility. On the other hand, theinternational steel industry has undertaken transformation a decade ago,by means of merging, restructuring and strategic alliances to enhancetheir own competitiveness. Under the global financial crisis influence,Chinese domestic real economic suffered a severe blow. Being a pillarindustry in China，the demand of steel has been reduced at the same time.Due to changes in domestic and foreign macroeconomic demand, steelindustry of China is indeed under tremendous pressure for restructuringor reformation. The State Council and the Ministry of Industry had issueddocuments giving guidance on the industrial restructuring, mergers andreorganization of the steel industry. Under this background, it is thuscrucial to conduct an evaluation of the steel industry to assist the smoothprogress of the above-mentioned reform measures.This article carried out a review of the domestic and foreign enterprises valuation theories. By comparing the most prominent theories,I finally selected several valuation models for enterprise valuation basedon the macroeconomic situation in China and the performance of ValinSteel itself. The aim is to identify the appropriate valuation method of thesteel industry by comparing the suitability and accuracy of variousvaluation models, and subsequently, to provide a reference for futurechallenges in asset valuation during the reform of iron and steel industryof China.