The Investment Analysis Of BH Company’s WN Project

The development of private equity investment in China has more than20years. With thelaunch of the gem in2009, more and more high-growth enterprises which are small andmedium-sized began to be listed as a long-term strategic target. High investment returnsattracted a large number of private equity investors. Since then, private equity investment hasgradually entered a stage of rapid development. The hazard had been hidden behind the hotmarket in the equity investment industry. The analysis of project investment is too simple,which makes the investment projects seriously deviated from the price. Coupled with theadjustment of economic policies, there was an unhealthy state of existence that a lot of IPOprojects were shelved that private equity investors has participated in. Combined with its ownpoor liquidity, high return on investment, strong professional of investment, the problem ofasymmetric information, thus how to obtain high quality investment projects and thepre-investment’s analysis has become the focus of private equity investors where they paidmore attention to. The trade union and the theoretical circles have some discussions andresearches on current situation of the private equity investment projects. So based on thebackground, the author did some investigations and researches analysis that she participatedin the practical project.From October to December in2014, the author worked as an intern in a private equityfund. In practice, the company where the author belonged to was preparing to invest in WNproject. The author participated in the pre-investment analysis of the project. In this process,the author has got some first-hand information, and combined with the practical situation ofthe WN project, the author conducts a more comprehensive analysis on the WN projectstarting from the perspective of private equity investors.The main contents are as follows:The first part is the introduction. It includes the research background and its significance,the researches both at home and abroad, the research methods, possible innovation andlimitations and so on. The second part is the project investment background. It mainlyintroduces the basic situation of WN project and the general situation of private equityinvestors, the basic ideas of private equity investment to the WN project. The third part is the analysis of project investment demand. According to the analysis of the project investmentpolicy environment and market environment, the author learns about the big background ofthe project investment belongs to the industry. Then the project investment estimation isintroduced. The fourth part is the analysis of WN project investment benefit. On the basis oforganizing the relevant financial data and information on the project, the author calculates andanalyses the sales income and business taxes, cost, profit and data, so she then determines theprofitability of the project. On the one hand the return of investment project is determined bythe index of the net present value, payback period and internal revenue, and so on; on theother hand the anti risk ability of the project is determined through the Break-Even Point andthe uncertainty analysis. The fifth part is about the analysis of WN project investment risk. Itanalyses the possible risks in the process of the whole investment mainly from the threeaspects of the project itself, the item company and private equity investors. The sixth part isthe conclusion. Based on the above analysis, the author draws the general conclusion that theproject is worth to be invested.