A Case Study Of CECEP Solar Energy Co.,Ltd. Valuation Under The Background Of "Carbon Peaking And Carbon Neutrality Goals"

At present,the world emits about 51 billion tons of greenhouse gases into the atmosphere every year.Climate warming has brought serious environmental problems such as increased extreme weather and destruction of ecosystems.The "Paris Agreement" requires the parties to the United Nations Framework Convention on Climate Change to reach the global peak of greenhouse gas emissions as soon as possible.As the world’s second largest economy,China has actively responded to the international call.General Secretary Xi Jinping announced at the United Nations General Assembly on September 22,2020 that China will strive to achieve "carbon peak" by 2030 and "carbon neutrality" by 2060.At present,the national carbon emission trading market has been launched,and photovoltaic power generation,as an important starting point for realizing the "dual carbon" goal,has attracted many investors to enter the market.The valuation of photovoltaic enterprises has become an important issue in investment activities in this field.With the development of the carbon emission trading market,CCER revenue in the voluntary emission reduction market has become an important factor affecting the valuation of photovoltaic power generation companies.Therefore,this paper takes CECEP Solar Energy Co.,Ltd.as an example,considers the cash flow impact of carbon emissions trading,and conducts a case study on the valuation of CECEP Solar Energy.Through literature review and theoretical basis,this paper theoretically analyzes the mechanism of CCER revenue in carbon emissions trading on the valuation of photovoltaic power generation companies in the context of " Carbon Peaking and Carbon Neutrality Goals ".Then,by comparing various valuation methods,the EVA method is considered as a valuation model suitable for photovoltaic power generation enterprises.On the basis of theoretical analysis,this paper selects CECEP Solar Energy as representatives to conduct case studies.Through the adjustment of valuation projects and parameter determination,the EVA method is used to obtain the valuation results after considering CCER income.Then,based on the valuation results,a sensitivity analysis is made on the weighted average cost of capital(WACC),growth rate g and CCER price.Finally,this paper uses the market method as an auxiliary valuation,and compares the valuation results with the changes in the stock price of solar energy companies after the valuation benchmark date to evaluate the reliability of the EVA valuation results.Finally,this paper uses the event study method to empirically test the impact of the " Carbon Peaking and Carbon Neutrality Goals " on the market value of CECEP Solar Energy,which provides empirical evidence for the rationality of the theoretical analysis of this paper and the valuation results.The research results show that: First,the " Carbon Peaking and Carbon Neutrality Goals " means that the development of the carbon emissions trading market will be accelerated.CCER is a supplement to China’s voluntary emission reduction market,and photovoltaic power generation companies,as new energy companies,can directly benefit from it.When valuing photovoltaic power generation companies,the value enhancement of future CCER cash flow to related companies should be considered.Second,this paper compares and analyzes the EVA method with other valuation methods,combined with industry characteristics and enterprise characteristics,and finds that the EVA method can obtain a more accurate and objective photovoltaic power generation enterprise value.Third,according to the valuation results,the stock price of CECEP Solar Energy was undervalued by the market on the valuation base date.Sensitivity analysis shows that the weighted average cost of capital has a greater impact on the valuation results,and the growth rate g and CCER price have a decreasing impact on the valuation.Compared with the market-based valuation,the company’s stock price has gradually fluctuated around the EVA valuation results for more than a year after the valuation benchmark date,which further proves the reliability of the valuation results in this paper.Empirical results show that the launch of a national carbon emissions trading market has had a positive impact on the market value of CECEP Solar Energy.The case study in this paper can be extended to the valuation study of general photovoltaic power generation enterprises,which has strong practical significance.According to the conclusion of the case,this paper puts forward the following countermeasures and suggestions: First,investors should choose a valuation model suitable for photovoltaic power generation enterprises,and consider the impact of carbon emissions trading on enterprise value.Second,for internal managers of enterprises,it is necessary to pay attention to the role of cash flow income brought by carbon emissions trading in project investment decision-making.Third,for government regulators,it is necessary to further open up the approval of carbon emission trading projects,urge the transparency of CCER prices,and improve the construction of the carbon emission trading market.