Valuation Of The Shell Recourse Under The Reverse Merge

China’s securities market developed very quickly. More and more company want to appear on the market for that they need more funds under their rapid expansion. A very efficient way-Reverse Merger get more attention on the way to get listed. But when more and more company want to make an reverse merge the value of the shell recourse become more and more expensive, far away from its’true value. In this background how to measure the value of the shell resources attract a lot of research.The reverse merge belongs to the scope of merger and acquisition. So the value of the shell recourse belongs to the scope of enterprise value assessment. This paper research the method of enterprise value assessment, found that the traditional valuation method is limitation when it was used in the valuation of the shell resources, for that it can’t descript the feature that the shell resources is represent the right to financing on the market. By point out the weakness of the traditional valuation, we constructed a way to measure the shell recourse value based on the perspective of shell acquire. In this way, we divided the earning of shell acquire to three point, include the value of tradable right, the value from the company become publicly listed, the value of the tax incentives when the company become publicly listed. By analysis the earning of the shell acquire we summed all of the value that the shell acquire can earning from the reverse merge. Then we treat this value as the shell recourse’s value. Then we used our methods in a true case of the Shan Xi Natural Gas Company, analysis all of the earnings of the company’s shareholder.At last we found that compare to the other valuation method, the way based on shell acquire earning can be more fit for the shell, when we definition the shell as a right of financing. Beside that the method based on acquire earning is more closed to the concept of revenue outlook. And in this way, we can first put the method of valuation of the shell recourse in practice.