The Study In Valuation Of PE Investing Pre-IPO Enterprise In China

Private Equity (PE) in developed countries spans nearly a whole century. International Data Group(IDG) has embarked on China’s private equity investment market development in 1989. While in China, the appearance of domestic private equity is after 2004.Since the first step in 2004, China’s PE has entered the era of rapid development. And after more than a decade’s development, the registration funds of domestic fund industry association has reached 20270. The managed paid in fund is 3.66 trillion. The capital scale is the second largest in the world, next only to the U.S.. Nevertheless, the relevant theoretical research of China’s PE market has not formed a system. On the other hand, academic research is far behind the development of practice. The essay systematically analyzes PE investment, especially the stage of Pre-IPO, and thoroughly studies the values of assessment in terms of practice.The essay introduces basic conception of PE in detail at the first part, including organizational form, operation procedure and value-added services, meanwhile emphatically introduces the new features in the stage of Pre-IPO in the past five years. The second part is the presentation and comparison of the current valuation system in different categories. It gives a contrastive analysis to three quantitative valuation metrics which commonly used in the procedure of PE practical operation. The third part particularly makes a detailed research on the relevant qualitative factors which are supposed to be considered in decision-making process as well as works out regression equation by empirical analysis. The last part takes Wansheng Stocks as an example for verification.The essay lays emphasis on analyzing the factors of PE investment valuation in terms of practical operation, especially the factors which cannot be quantized but enjoys a significant state in the investment decision process, also arranging quantitative factors which hard to grasp in practice process. All of the above are benefit to risk control to some degree and supposed to take a positive role in practical operation in Pre-IPO stage.