Valuation Method Study Of Commercial Bank In The Case Of China Merchants Bank

The banking industry, as a pillar industry in China's financial industry, its value assessment usually attract a large number of stakeholders' attention. Meanwhile, with the overseas financial institutions have shares in domestic commercial banks in a large scale, there are also many domestic commercial banks merging between itself. The reasonable value assessment of commercial banks undoubtedly have some positive effect in our country's financial market: the capital regulation of the investor's financial operations, commercial bank management's operational planning and the supervision from administering authority.In this paper, we first discuss the meaning of current value in value assessment.We also have a in-depth analysis of the fair value, meaning and defects market value, intrinsic value and liquidation value. Intrinsic value was found, although not a precise concept, but it's a investment appraisal concept evaluation. Its provides a standard of judgment, so that the value assessment of commercial banks make sense. In this article we choose the intrinsic value as the standard value in valuation of commercial banks; Secondly we elaborates four current academic enterprise evaluation method, namely asset value method, the market comparison approach, income now value method and option valuation method. And pointed out their own characteristics, scope. Comparing their advantages and disadvantages, combined with the value of the foregoing analysis, the properties of intrinsic value, derived using discounted cash for its rationality and scientific; Finally, we choose China Merchants Bank as an example, using dividend discount model to assess its value(one method of discounted cash flow), the result was found highly correlated with its value in Shanghai market.