The Research On Equity Valuation Of BY Company

The rapid develop ment of econo mic globalization creates an upsur ge of capitaloperation. At the same time, the rapid expans ion o f the cap ital market promotes thedeve lopme nt of business valuation theory and practice, attracting more attention onthe eva luation o f va lue of s hareholders’ equity. In the recent years, China hasgradually established the multi-le vel capita l market syste m inc lud ing motherboards,sma ll board, the GEM and the new board. New board is a trading p latform of equitylisting trans fer and placement for the high-growth scie nce and techno logy unlis tedcompa nies, which is of great significa nce for those sma ll-scale, high r isk, diffic ult tofinanc ing and fast growing s ma ll and med ium high-tech enterprises. The new boardbuilds a hub connection between the different leve ls of the capita l markets. There fore,the correct understanding and assess ment of the equity va lue of the new board is thepremise issue before mak ing investment decis ions.Since China lacks scientific theoretical guidance about how to evaluate equity,China’s equity valuation is relatively lagging behind both in theory and practicecompared to the western countr ies. In addition, there lacks the research environme ntand capita l market environment as western countr ies, plus the new board is stillimmature and the foundation is still s ha llow, lead to assessme nt of the equity va lue ofresearch the new board is becoming more and more important.In this context, this artic le ana lyzes the operating conditio ns and fina nc ialcond itions and future strategic counter measures of the case company BY co mpany,and compares a variety of commo nly used evaluation model advanta ges anddisadvantages and applicability, and determines to use the income approach and theasset-based approach to the interests of a ll shareho lders in BY company at the sametime, the inco me approach takes equity cash flow model of the two-stage. This papercomprehe ns ive compares of the results of the income approach and the asset-basedapproach, combines BY co mpany actua l s ituatio n and the characteristic of high r isk,high growth of the new board, then come to the conc lus io n: the applicab ility andaccuracy of the inco me approach is higher than asset-based approach, and thus theresult o f inco me approach is the interests of a ll shareho lders in BY company. Thisassessment result is ver ified by orientatio n offer ings after the valuation date. Fina lly, this artic le ana lyzes the reason of the pre mium of DCF model for evaluation of BYcompa ny form t hree aspects. And analyzes the process of va luation prob lems andfurther research directions, in an atte mpt to he lp the investors to make investme ntdecis ion, provide some information o n asset va luation for corporates in new boardabout mer gers and acquis itio ns, or ientation offer ings and FBIE project se lection.