Research On Real Estate Enterprise Value Evaluation Based On Residual Income Model

Recently,with the concept of ‘real estate is for living in but not for speculation' and ‘de instrumentalization',it has shown a stable development trend in China real estate industry.In addition,the financing difficulty of real estate enterprises increases with the increasingly strengthen in the financing supervision for real estate industry of CBIRC,the principle of ‘prudence and selection of the best' the bank adhered to and threshold raising of development loans for the industry.Some small and medium-sized real estate enterprises are facing the situation of bankruptcy,reorganization and merger,and the real estate industry in China is also changing to the direction of high-quality development,and the industry concentration will be greatly improved.Therefore,it is necessary to evaluate the real estate enterprise value accurately so as to grasp the situation and prevent the market risks of the industry.The residual income model pay no attention to the net cash flow of the enterprise,but to the process of wealth distribution of the enterprise.The improved residual income model can make full use of the financial data of the enterprise,which is more suitable for the value evaluation of real estate enterprises.The paper is aimed to explore a more accurate and effective method for evaluating real estate enterprises value by testing the efficiency of residual income model(RIM).First of all,the paper collates the relevant concepts and the methods development for enterprises evaluation,summarizes related literatures about the origin and improvement for RIM of scholars at home and abroad,and explores the methods and cases for real estate enterprises evaluating in China including RIM.Secondly,summarizing the characteristics,current situation and prospects of the real estate industry,and some standards need to be followed and common methods in the real estate enterprise value evaluation.Thirdly,due to the difficulty in using the original RIM,the financial data can not be effectively used,and the introduction of DuPont financial analysis system can effectively solve this problem;at the same time,in view of the disadvantages of infinite prediction,this paper also proposes an improved method,and checking the applicability of the model in combination with the relevant characteristics of real estate enterprises.Finally,taking a specific analysis for the improved RIM in combined with the real estate enterprise LS Real Estate Co.,Ltd.And analyzing the internal value factors of the company by using the sensitivity analysis in order to find the relevant indicators need to be paid more attention to when using the method to evaluate the enterprise so that improve the accuracy of the evaluation,and also remind the management of paying more attention to corresponding indicators to facilitate decision-making and improve the internal value of enterprises.Result shows that the value obtained by using RIM is 3.4% higher than the market value on the benchmark date,which indicated the method can be appropriately applied to LS Real Estate Co.,Ltd.and even other enterprises in real estate industry;It is also found that the cost of equity capital r,Net profit margin on sales MOS,total asset turnover ATO and equity multiplier EM have a bigger impact on the internal value for the enterprise,which deserves the attention of the management and seriously consideration of professionals for evaluating the enterprise value when using this model.7 figures,23 tables and 91 references are included in this paper.