Research On Enterprise Value Evaluation Of Listed Company

With the rapid development of China's capital market, corporate investment and financing instruments are increasingly rich, and the number of corporate IPO or M&A cases are increasing. Besides, the size of VC, PE and other equity funds also show explosive growth. At the same time, from a macro perspective, given that the ratio of market capitalization to China's current stock market is much lower than the United States and Japan and other developed countries, there is still a large space for asset securitization. In all of these operations on the capital markets, one core problem is how asset pricing scientifically and rationally asses the value of target assets. This is a key issue not only refers to the practical operation in capital markets, but also to the important academic research question. This paper will focus on the core issue of asset pricing study.This paper is divided into two parts, namely, the theoretical research part and case study part.In theory part, this paper will introduce the following four key aspects of enterprise valuation:the definition of enterprise, the value of the enterprise, methods used to assess the value of the enterprise, the application of these valuation methods.First, this paper introduces the concept of enterprise, which is a major player in the market economy. Defined from different perspectives, enterprise value can be expressed as book value, intrinsic value, transaction value, replacement value and liquidation value. The reason why enterprise has value and can be traded is because it has the production profits (cash flow) capabilities. Based on this, the paper describes three common assessment methods in current capital market:cost approach, income approach and comparative approach, then summarizes these three ways. With these valuation methods, the most important thing is to decide which method to be used. Since only the most reasonable assessment approach is selected, the value of the enterprise can be relatively accurate.In case analysis part, this paper selects the listed company Lutai A as research target. By theoretical analysis, the author selects the dividend discount model, and assess the value of the enterprise Lutai A by this method. The difficulty of using the dividend discount model lies in three core arguments:the discount rate, the dividend payout ratio and dividend growth rates. The capital asset pricing model aims to estimate the discount rate by referring the past 14 years Lutai A dividend payout ratio. To estimate the dividend growth rate, this paper introduces the concept of creative net profit CAGR of 5-year moving average. By checking the data of Lutai A net profit CAGR of 5-year moving average over the past 10 years, the author chooses exponential regression model to predict the Lutai A net profit CAGR of 5-year moving average to the end at 2019, and estimates five years dividend growth rate from now on. After the fifth year, this paper estimates the profit compound annual growth rate using the industry development stage and the main source of income for the company, and makes evaluation to the global economy. Finally, the author gets the intrinsic value of Lutai A by model calculation.