| Bank is the core of our financial system, is an important part of national economy, has played a decisive role in China’s economic development and social stability. As of the end of December 2015, total market capitalization of the 16 listed banks accounted for about 16% of the total market value of Shanghai and Shenzhen, we can see 16 listed banks proportion of all listed companies in the proportion of small, but it has occupied in the stock market a pivotal position, even determine the direction of the entire stock market. In many kinds of stocks, banking stocks has always been to run smoothly, lesser known ups and downs. But with the interpretation of the A-share bull market and subsided, many commercial banks also shares with the broader market volatile ups and downs. Thus, the volatile ups and downs of stock prices,sparked Reflecting on this question: whether the share price of bank shares at a reasonable price? At the same time, since China’s accession to WTO, foreign banks into the domestic market, making competition between Chinese banks has become increasingly fierce, there has been an increasing number of mergers,acquisitions, stock issuance and other activities, as well as the more recent An increasing number of listed banks will launch internal employee stock ownership plans. Therefore, the banks themselves, these economic activities depends on its ability to successfully carry out an accurate valuation.A reflection on these issues, the paper selected medium-sized joint-stock banks in the actual number of shares outstanding, market share and time to market are more prominent investment banks, for example, to explore whether its shares at a reasonable price. This article is broadly divided into five parts:The first chapter is the introduction, describes the background and significance of this paper, research summary and the main contents of the paper at home and abroad, research ideas and methods.The second chapter briefly introduces the Business Valuation and assessment of the meaning of several commonly used method, and the advantages and disadvantages of these several methods of comparative analysis of the applicability and binding specificity of commercial banks, elected the equity free cash flow discount model to assess the equity value of China Merchants Bank, and the choice of the market price-earnings ratio and book value method of valuation to be assisted verification results.The third chapter is top-down approach, a comprehensive analysis of the macroeconomic environment,the development of China’s banking industry, China Merchants Bank a competitive advantage and financial position angle, lay the foundation for earnings below.The fourth chapter is theory with practice, the use of case study methods, China Merchants Bank, for example, to assess its value, and the impact of the equity value of the sensitivity factor sensitivity analysis.The fifth chapter summarizes the conclusions of this paper. By linking theory with practice, we draw the following conclusions: FCFE is suitable for evaluating the equity value of China Merchants Bank;using the FCFE model to assess the value of a share is 17.82 yuan, China Merchants Bank, excluding special turning point will China Merchants Bank to assess the results of the past two years with the share price compared to the discovery, in 2015 the share price fluctuate substantially in the assessment results show that in 2015 the value of having a certain degree of rationality. The first four months of 2016 the share price lower than the assessment results, and its value to some extent underestimated, but stock prices gradually approaches to the evaluation results, indicating that the current stock price at a relatively reasonable price; found Total assets increased by sensitivity analysis and the rate of change in the cost of equity capital a great impact on the equity value, the value should be very careful and meticulous. |
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