China’s Commercial Banks Method Of Valuation

Currently, the misconduct of the world to promote financial integration, finance becomes more and more important, the financial sector plays a decisive role in the national economy. As China’s economic reform and improvement of the progressive development of the banking industry has become China’s comprehensive national strength, an important part of the gradual increase its status and role, and has been related to the vital interests of the economic development of each of us and our country. The fierce competition of foreign banks, commercial banks mergers, acquisitions, asset restructuring and other capital operation and more common, which makes the role of capital in the banking sector in particular, the value of commercial banks operating in the increasingly important and evaluation. In addition, investors in the financial markets, it needs to assess the value of the investment, therefore, the research value of the commercial banks are the main contents of this article.Stock market price, which is the efficient market theory, efficient market theory also believe that the stock is fully reflected in market information. China’s stock market started late, the development is not mature enough and more government intervention, leading to a lack of effectiveness of China’s securities market. Reform of the stock market index fell sharply in early circulation in our country, caused a lot of academics and investors to the stock price and the intrinsic value of listed companies is consistent with the idea. In addition, foreign banks stake in Chinese state-owned banks in the process, whether it is state-owned bank shares also caused controversy for sale, commercial banks, sale of assets, mergers and acquisitions, asset restructuring and other activities are effective, but also to a large extent depending on the value of the bank’s assessment.The company’s valuation is a core value of the securities research, but also the securities industry, the financial sector, all the results, analysis of macroeconomic analysis, fundamentally speaking, is to provide a basis for the company’s stock price, but also provides the basis for investment decisions. As the bank itself has the characteristics of high risk and high debt, the value of research and other industries are different, therefore, in assessing the value of the bank, you can not copy the method for general corporate valuation, coupled with the need to find practical more closely China Banking valuation methods. This paper aims to explore the banks listed company valuation methods, choose Shanghai Pudong Development Bank for the study, the current valuation of banks hoping to find the best match in the listed company the most appropriate method under the existing conditions.Business valuation methods to collect any kind of timely, accurate information plays an irreplaceable role in the premise, but also the assessment of the value. Search and quantify, may affect the value of the company conducted an assessment to the maximum extent possible, the factors in enterprise value assessment is essential. Industry insiders, properties and methods of business, each particular choice can not be generalized. If the carrying value adjustment method is more suitable for comparison to determine the expected cash flows of enterprises, taking into account the comparative financial ratios and valuation methods with relatively high business confidence data is more appropriate. For the same business can use different assessment methods, the deviation between the results of the comparison of different methods, considering, but the end result depends on the person’s subjective professional judgment. Financial leverage, higher than the daily business of banks in general, coupled with the high-growth stage listed banks, now more than a fixed dividend payment policy, not universal. Therefore, the option is more suitable choice of assessment methods to assess the discounted cash flow method.This paper summarizes the development of theories and models since the first sort of business valuation scholars from various countries, and set its different pricing model is applicable to specified conditions, and then combined under China’s current financial market environment, the actual selection and our bank valuation model is more close the case. This paper is divided into five parts.The first part is an introduction, including theoretical and research ideas and methods described in the background and significance of the valuation and abroad.Then discribes the disadvantiges of this paper.The second part describes the four basic methods of business valuation theory models, as well as the scope of the assumptions and methods, content and place functions, and each method.The third part, combined with the actual situation of China’s banking sector, affect the value of commercial banks to analyze the factors that comparative analysis of different pricing models summarizes how to select the method of valuation of commercial banks.The fourth part, choose Shanghai Pudong Development Bank as a case study, briefly introduced the first case, followed by the use of discounted cash flow method of valuation interest in Shanghai Pudong Development Bank Act to do so. The fifth part is the basis of the conclusions of the research and thinking on the combination of theory and case studies, and summarizes several key factors that affect the value of commercial banks, and analyzes the shortcomings of this article.