Application Research Of New Three Board Enterprise’s Equity Value Evaluation Method

Since the financial crisis, the establishment of an improved multi-level capital market system has become a key factor for the sustained and healthy economic development in China. The comprehensive expansion and rapid development of the New Third Board Market has attracted a lot of attention. Those small- and medium-scale enterprises with financing difficulties and high risks have seen the dawn. They are all actively seeking to list on the New Third Board Market, looking forward to a healthy and rapid development. Less than three years ago, total enterprises of the New Third Board Market were just within 100 to 200; but now the total number has increased to 1,000 or so. This growth rate in the number of enterprises is so obvious that its momentum of development cannot be underestimated nowadays. The development trend and the advantages of the New Third Board Market are emerging; moreover, there are many investors holding an optimistic attitude to it. Why are the investors having so much passion for the New Third Board? The reason is that they want to find some enterprises with investment value. Thus the accuracy of equity value assessment is important for investors. To correctly understand and accurately assess the equity value of those enterprises listing on the New Third Board are the important prerequisite and core issues for making investment decisions. Therefore, this paper will delve into assessing the value of corporate equity listing on the New Third Board. By choosing an appropriate assessment method for those enterprises of the New Third Board, we provide the investors and those enterprises of the New Third Board with a constructive method for assessing the equity value.This paper combines the normative analysis with the case analysis. Firstly, we make comprehensive and in-depth analysis of the unique characteristics of those enterprises listing on the New Third Board; secondly, we make applicability analysis for the Four Basic Assessment Methods for those enterprises listing on the New Third Board; at the same time, referring to the AHP of operations research, combining with questionnaires, taking the experts’ important advice on the feasibility of each equity value assessment method for those enterprises listing on the New Third Board, we obtain the weight ratio for each method when assessing equity value of those enterprises listing on the New Third Board, and finally make all enterprises sorted according to the weight ratio. The results show that the B-S Model method accounts for a bigger weight, having an absolute advantage; followed by the Equity & Cash Flow method; moreover, the weights of other assessment methods are quite different from each other. Therefore, when applying to the cases of those enterprises listing on the New Third Board, we select the Equity & Cash Flow method and the B-S Model method to assess respectively the equity values. Then we compare the assessed equity value with its market value trending, so as to verify that whether these two methods can accurately assess the equity value of those enterprises listing on the New Third Board. The study suggests that the B-S Model of the Real Options method is suitable for those enterprises listing on the New Third Board; the assessed equity value of B-S Model is also close to its market price, providing the investors with a practical reference.