Reasearch On The Value Investment Of Dahua

Along with the development of economic system reform and opening-up to the outside world, the capital market of China has passed 20 years of rapid development, which mature markets have gone through a number of decades or even centuries to complete the road. Value investment has always been the mainstream investment philosophy in the West. But in recent years, faced with the ever-changing domestic stock market, more and more rational investors advocate should turn their attention to the business level and performance of the enterprise itself. Scientific assessment of the intrinsic value of listed companies through in-depth analysis of the fundamentals of information, to find suitable investment opportunities in the price fluctuations. Therefore, guided by the theory of value investment, in-depth analysis and research on the intrinsic value of listed companies' stock, has important reference significance to the management of enterprises and the rational investment of investors.Security industry is the sunrise industry supported by China, which has become a new growth point of the national economy. Many outstanding security companies and capital market work together, with the power of capital gradually become bigger and stronger. In this context, the study of the intrinsic value of security companies to improve corporate investment value and promote rational investment has important theoretical and practical significance.Based on the theory of value investment, this paper selects Zhejiang Dahua Co., Ltd. (Hereinafter referred to as Dahua), one of the outstanding enterprises in the security industry, as the empirical object of this research. First of all a fundamental analysis is conducted from the aspects of development of the security industry and enterprise development. And then the intrinsic value of Dahua is estimated by using the free cash flow discount model of the absolute valuation method and the price-earnings ratio valuation model of the relative valuation method. Through the qualitative and quantitative analysis and research, the conclusion is:From the results of fundamental analysis, the overall development trend of the industry and the operations and financial condition of the enterprise are very good. Dahua has a significant investment value. From the valuation results, the investment value of Dahua has been underestimated by the market. So it can be a lone-term holding as a value investment.