The Research For Investment Value Of China's Listed Companies In Environmental Protection Industry Based On Grey DEA Approach

Faced with the challenges of the international financial crisis and global climate change,the world's major economic power regard the green economy as an important direction for impelling economic growth and promoting the transformation of economic development modes,moreover,some developed countries have even used the advantages of energy-saving and environment-protecting technologies to establish trade barriers in international transaction.Therefore,whether it is to adjust the economic structure,change the mode of economic development,improve the quality of the environment,break through the current scanty predicament of resource and energy,or deal with climate change and seize the commanding position of future global economic competition,we must vigorously develop the environmental protection industry.In the “Twelfth Five-Year Plan”,the Chinese government has included the environmental protection industry as one of the “strategic emerging industries” and regards the environmental protection industry as a new way to break the current bottleneck of economic development and a new driving force for economic development.In the past five years,China's environmental protection industry has faced unprecedented opportunities for developing thanks to relevant national policies.From the 18 th National Congress of the communist party of China,we have been including the construction of ecological civilization into the “Five in One” plan overall layout and upgrade ding the green development as one of the five major ideas of development in the “Thirteenth Five-Year Plan” proposal,and then embracing the construction of ecological civilization into the mainly social contradictions in the 19 th National Congress of the Central Committee.In the meanwhile,government proposes to achieve the goal of beautiful China by 2035.The environmental protection industry steps to a new era,ushering in a new turning point in the history of development.As a sunrise industry,the environmental protection industry is favored by investors,while how to rationally and effectively analyze the development status of the environmental protection industry and thus control investment risks has become an urgent task for investors.Therefore,a reasonable assessment of the investment value of listed companies in the environmental protection industry has become extremely important and imminent.In this paper,under the premise of comprehensively reviewing the research on the investment value of listed companies at home and abroad,combined with the status quo and influencing factors of China's environmental protection industry,a more reasonable and stable method for evaluating the investment value of listed companies in the environmental protection industry has been constructed,which is used to conduct empirical analysis on the investment value of listed companies in the environmental protection industry,and pick out specific listed environmental protection companies with investment value.Ultimately,the goal is to improve the investment efficiency and provide effective opinions and suggestions for investment in China's environmental protection industry.First of all,we sort out the theories and methods of domestic and foreign companies' investment value of listed companies,and analyze the investment value of listed companies in the value analysis method of basic analysis schools.Secondly,outline the environmental protection industry in China,which mainly includes the definition of listed companies in the environmental protection industry and the analysis in the current status of those listed companies from the three aspects of macro environment,industries,and enterprises;Then,the GM(1,1)method is introduced to process the original data,remove environmental variables and random errors,and construct an investment value evaluation model for listed companies in the environmental protection industry based on the gray DEA combining simulated data with the BCC model.Finally,With the combination of qualitative analysis and quantitative analysis,horizontal comparison and longitudinal analysis,we conduct a comprehensive analysis of 44 listed companies in the environmental protection industry of China.At the same time,in the selection of the number of input and output items,the indicators are divided into two groups based on profitability-operating ability and debt paying ability-growth ability,which not only satisfy the requirements of the number of decision-making units and the input-output units(The number of the former must be greater than twice the number of the latter),but also find that the company's investment value is mainly identified through the indicator of profitability-operational ability,especially the indicator of operating profit.The empirical results show that from a horizontal point of view,the average comprehensive technical efficiency value of 44 Environmental listed companies is 0.863,and the values are between 0.7 and 1.From the observation,the overall difference is not too large,indicating a good development of overall performance in this industry.While those Indicators do not effectively distinguish the potential value of different stocks.However,return on assets,net sales rate,operating profit,return on net assets,turnover rate of total assets,and turnover rate of current assets can effectively distinguish the investment value of stocks.Stocks like Central Equipment,Welle,Yongqing Environmental Protection,Kelin Environmental Protection,Hanwei Electronics and Yuanda Environmental Protection are considered DEAs invality from the perspective of the company's operating capacity and profitability,and from the perspectives of solvency,cash availability and growth ability.Their efficiency values are relatively low and financial indicators do not fully reflect the value of stocks.There is ample room for appreciation,which means they are suitable for investment.From the vertical direction,Zhongyuan Environmental Protection,Chuangyuan Technology,Tus-Sound,Fuchun Environmental Protection,Dongjiang Environmental Protection,Zhongjin Environment,Hanlan Environment,and Hongcheng Waterworks take on a picture of scale descending for the past consecutive four years.Some companies such as Zhonghe Technology,Kelin Environmental Protection,Qingxin Environment,and SDL appears to be scale descending for the past consecutive three years,suggesting their lower operating efficiency and their bad performance that cannot supporting the expansion of the company.Investors are not optimistic about those company,consequently,decreasing the possibility of rise in stock price and the suitablity for investment.As for companies with constant returns to scale in four or three years like Fountain,Zhongshan Public Utilities,Beijing Capital,Xingrong Environment,and Origin Water are particularly worthy of investors' attention because their scale remains stable and the ability in market pressure-resistance is strong,and there is huge room for growth,moreover,the latent value of investment is high.Through the analysis of the average basic trend of the financial situation of some listed companies in the past four years,the results show that investors pay more attention to the company's earnings.Take Feida Environment Company as an example to analyze the frontier of its financial indicators.For its financial indicators of profitability,there are redundant inputs or outputs,and both need to increase,which means that the company's earnings are worse currently and requires increasing to improve company's value,especially increasing the operating profit by 4186.394,which further explains that operating profit is the main indicator of investors' attention and echoes the above conclusions.Obviously,based on the intrinsic value of the company,this paper accurately extracts the characteristic variables that measure the investment value of listed companies,constructs a DEA evaluation model,and applies the grey DEA method to empirical analysis to make the research more advancing with the times and make up for flaws existing in the traditional methods which are easier influenced by human factors and environmental factors in evaluating the values of those listed companies in environmental industry,marking unique research characteristics.Through the empirical research on the investment value of listed companies in the environmental protection industry,this article can help investors to make more effective decisions and avoid risks,simultaneously,operators can also focus on input indicators that have a great impact on stock prices,and reasonably control them to improve stock movements,further attracting investors.