Study On The Valuation Method And Application Of Water Listed Companies In China

With the improvement of China's economic level,people's attention to the protection of the natural environment continues to improve,the quality of living environment has a higher demand.The government will invest a lot of money for environmental protection.Capital market will also have a large part of the funds into the environmental protection industry.The water industry as an important part of environmental protection,will be an unprecedented attention.China is a water-poor country,the protection of water resources,conservation,governance will be more attention.As a result,the water company will flourish as an important environmental force.In order to effectively manage water pollution,improve the efficiency of the use of funds,so that funds into the more efficient water companies,the valuation of water companies has become an important part of the link.A reasonable valuation of water companies,to guide capital inflows to more promising companies,more efficient companies.This paper will summarize the factors that affect the value of China's water companies at the present stage,such as policy factors,future water use in China,future water price and the implementation of new environmental policy tools,and use the theory of enterprise valuation The future development trend of the water industry to do a reasonable analysis.Combined with the valuation of the company's various methods of application conditions and the use of the environment,and ultimately choose a suitable for the current stage of the valuation of water companies.At present,the water industry is a relatively new industry,China's valuation of water companies have not been too much research,has not yet formed a complete system theory,the results of this paper for the valuation of water companies have a certain reference value.This paper mainly through the use of case analysis and comparative analysis of two different ways to study the case.In the actual case,the absolute valuation method,the cash flow discount method,is used to estimate the water company,and the conclusion is negative.And then use the relative valuation method,that is,the price-earnings ratio method,the book value method,respectively,its valuation,obtained its share price of 5.49 yuan,6.47 yuan.Finally,the reasons for the failure of the cash flow discount method are analyzed and the conclusion is drawn-the current valuation of the water company is suitable for the use of the relative valuation method.This paper not only takes into account the characteristics of the water company itself,but also takes into account its development stage when considering the applicable method of water company valuation.After the capital market will invest in water companies to make recommendations: the current stage of the water company is promising,there is a lot of room for development.The use of relative valuation method for the valuation of the target company to determine their own investment intentions will be more reasonable conclusions.