Investment Value Analysis Of Minsheng Bank

With the rapid development of social economy, business has made a great progress inour country. How to measure its operating performance and economic value added (EVA)becomes a new focus. This article describes the meaning and calculation method of EVA.According to the specific conditions of commercial banks, it makes some adjustments tocomputational formula. Taking Minsheng Bank for an example, this paper introducesthe computational process of EVA in detail. And then makes enterprise value assessmentbased on the EVA value.As a major domestic joint-stock commercial banks, Minsheng Bank has always had agood operating performance in recent years. By the end of2012, both the total assets andthe total liabilities exceeds three trillion yuan mark, and the return on equity is25.24%,the proportion of Intermediate business income mainly in fee and commission in operatingincome continues to grow. But with lower efficiency of the company’s asset management,it also needs to be improved.This paper values the Minsheng bank by EVA and equity free cash flow valuationmethod respectively. Due to the commercial banks is different from other companies, itmakes some adjustments in the calculation process of the two models to determine theMinsheng Bank’s corporate value.This paper also analyses the market environment, liquidity and asset quality ofMinsheng Bank. In addition, comparative analysis of the Minsheng Bank loan migrationrate for nearly three years to measure the degree of change risk of commercial banks, andthe Minsheng Bank profitability strong description of the company has some ability tocompensate for the risk, so the recent overall Minsheng Bank will not produce anyoperational risks.Compared with the free cash flow of equity valuation results, although thecalculation method of two models is different, the results show that the value of MinshengBank now is completely underestimated...