A Case Study Of HL Construction Company Equity Valuation Based On Improved Market Approach

In the context of carbon peaking and carbon neutrality goals,the country requires to advance the infrastructure investment moderately,and meet the new development demand of the infrastructure,construction and other industries.Facing the demand of traditional investment and the upsurge of Stock Right Trading,the valuation of stock right of construction enterprises plays an important role.At present,the capital market of China’s construction industry tends to mature,and the market method is the main method to determine the equity value of construction enterprisesNow’s,we use the market method to evaluate the equity value of construction enterprises as a case,improve the deficiency of the market method,and use the Principal Component Analysis（PCA）model to carry out the Quantitative analysis,the influence of subjective factors in the original method on the evaluation results is weakened.Two shortcomings of HL construction market method evaluation case are summarized as follows: First,the industry inertia of current value multiplier selection.With the development of the market,the construction industry has to transform and upgrade,extend the industrial chain,the value multiplier previously selected may not be applicable to the current construction industry.The second is the arbitrariness of comparable companies choices.At present,the selection of comparable company mainly considers the factors such as enterprise size and business scope,and the determination of the weight of comparable company mostly adopts the mean value.In this paper,we use principal component analysis to improve the market method,which is mainly reflected in two aspects: on the one hand,the choice of value multiplier.In this paper,principal component analysis is used to select the value multiplier which is suitable for the construction industry,and four value multipliers which are closely related to the construction industry are selected by analysis.Based on the Comparative Index System,this paper calculates and sorts the comprehensive scores of listed construction companies by principal component analysis,and obtains the difference rate between listed construction companies and HL construction company,select comparable companies with a smaller variance rate.Finally,the improved results are compared with the original results,which shows that the improved market method is more accurate to determine the equity value of HL construction company.Principal Component Analysis（PCA）is introduced to select value multipliers for construction enterprises and to screen comparable listed companies,in an attempt to use model Quantitative analysis to find a more suitable approach to value valuation of construction enterprises,thus maintaining the unity in the process of market method valuation,the operational process is simple and Operability,and multiple alternative comparable companies with the same scope of business can be evaluated.The improved market valuation method is more reasonable than the original method.It provides a new idea for determining the value of equity in construction industry.