The Value Evaluation Research Of Growing High-tech Companies Based On Real Options

The traditional business valuation methods are cost approach, marketcomparison approach and the income approach, these approach are applicable andscientific when assessing the general business. But it is difficult to use theseapproach to value the growing high-tech companies because of the unique valueand risk characteristics of the growing high-tech companies, The development ofthe real option theory offers a new way for growing high-tech companies to valueassessment. The biggest contribution of real options method is to measure thepotential value of flexibility,and which has great significance to the growinghigh-tech companies with highly uncertainty.Firstly, we analyze and summarized the characteristics of high-tech enterprisein evaluation, and combining the analysis of the traditional evaluation method toillustrate the limitations of growing high-tech enterprise value assessment of thetraditional enterprise value evaluation methods.Secondly, we analyze andsummarize the theory and application of real options, and the real optionsevaluation methods and their applications. Thirdly, we analyzed the features of thegrowing high-tech companies in real option, and chose Schwartz and Moongrowing high-tech enterprise value assessment model by comparing all kinds ofcommonly used real option model.Schwartz and Moon model is more realistic and workable than other realoption model, but there is some difficulties to use it in real life because of thequestions in China’s accounting system and data availability and so on.when we usethe Schwartz and Moon model In this paper, we improve the Random process andthe Parameter calculation of the model,and calculate the results of the valuation byMonte Carlo simulation.The calculation results show that the value per share of ChinaNetCenter iscloser to the value in end of2013, and reveals the value of the company in largepart. By sensitivity analysis, we find the important parameters affecting the stockprice to offer the suggestions to enhance the value of the company.