Research On Value Evaluation Of NEEQ High-Tech Enterprises Based On Schwartz-Moon Model

With the constant expansion of National Equities Exchange and Quotations (NEEQ), the financing function of NEEQ has become increasingly apparent and acquisitions of enterprises are more and more active. Given significant features of NEEQ listed high-tech companies and the current situation in the practice of evaluation, the paper carried out research on real option model when assessing the value of these enterprises, hoping to provide theoretical basis and practical guidance for investors to evaluate these enterprises value reasonably.The high-tech enterprises in the NEEQ have the typical features of NEEQ and high technology as well, such as:Small-scale enterprises with strong profitability and capacity of growing; More-volatile earnings performance, etc. The analysis of current reports relating to mergers and acquisitions in the NEEQ has found that tradition evaluation methods, especially the income approach, were used in the evaluation practice commonly. The traditional discounted cash flow method (DCF) ignores the possible risks and takes a static, single prediction for the revenue, so it couldn’t reasonably reflect the real intrinsic value of high-tech enterprises in the NEEQ.Considering the deficiency of tradition evaluation methods, the paper introduced Schwartz-Moon model to explore the evaluation approaches for the value of NEEQ high-tech enterprises. The model predicts the future cash flow of the enterprise with Monte Carlo simulation to represent the uncertainty of the future with its dynamic stochastic process. Taking Beijing Century Armstrong biotechnology limited as an example, the paper adopted the Schwartz-Moon model to evaluate the value of the company and judge the rationality of the evaluation results. Then the paper carried out sensitivity analysis of parameters in the evaluation model to identify key parameter variables. Five more typical NEEQ high-tech enterprises were evaluated based on Schwartz-Moon model to take further inspection of the operability and o applicability of the model.Through relevant case studies, the paper hold the view that the Schwartz-Moon model was more in line with the characteristics of NEEQ high-tech enterprises and provided a new way to evaluate the value of these enterprises. The evaluate results could reveal the intrinsic value of the enterprises, and provide a more reasonable market reference price for the related trading activities.