| In the recent years, Huayi Brothers Film Investment Co.,Ltd is developing veryrapidly. It was the largest winner in the latest Spring Festival evening show, the brighteststar in the Chinese media and entertainment industry. However, its performance in thecapital market is volatile. From03/2012to03/2013, its share price had exceeded79yuanand touched17yuan as well. Facing various news and instable share price, investors andacademicians realized the significance of appraising the intrinsic value of Huayi BrothersFilm Investment Co.,Ltd.The real option pricing method is a novel appraisal method. To some kinds ofcompanies which are different from the traditional ones, for example, those companies ofhigh input, high return and high risk characteristics, the real option pricing method is verysuitable. Because of absorbing the core thought of the finance option, that choice itself hasvalue, the real option pricing method can handle some kinds of situations quite well, suchus management flexibility in the real operation, the right and opportunity cost, so that theflexible management of enterprises can be estimated in the appraisal. Based on thetraditional Schwartz&Moon model, we simplified the model moderately. Based on thecompany’s historical data, its industry trend, its strategic plans and some other importantfactors, we finished parameters estimation more conservative, applied the crystal ball,imitating the real option model as many as10000times, and finally obtained the Companyoverall value, that is45517.86million yuan. Compared the result to that DCF method, weanalysis the implicit value of Huayi Brothers Film Investment Co.,Ltd. Converted theresult into the theory share price and compared it to the stock price in the capital market,we analysis investment opportunities of Huayi Brothers Film Investment Co.,Ltd. |
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