Research On Value Evaluation Of XinCheng Holding Group Based On Residual Income Model

As a pillar of China’s economic development,the real estate sector has attracted a lot of attention.Nowadays,the Banking and Insurance Regulatory Commission has tightened regulation on real estate financing,making it more difficult to finance the property sector,and the future development of enterprises is under serious scrutiny.As business leaders need to understand the market situation of real estate companies to properly understand the true value of their businesses,and investors need to make better and smarter investment decisions in the real estate sector,the valuation of real estate companies is becoming increasingly important.However,the use of traditional valuation methods to determine the value of real estate companies has limitations,as they cannot truly reflect the performance and value creation ability of real estate companies.Therefore,this paper selects the residual income model and a representative listed real estate company,New City Holdings Group,as the subject of the study based on the refinement of the model,in the hope of providing New City Holdings Group with a benchmark for improving the value of the company.This paper first compares the relevant information on the firm value methods and the residual income model in recent years,and based on this,introduces the meaning of firm value and describes the firm value methods that serve as the theoretical basis for the following paper.Second,the environment and financial situation of New City Holdings Group are analyzed by using the case study method,and for the financial situation,this paper starts from the four aspects of performance and analyzes the financial data from 2017 to 2021 in depth to understand the development situation of New City Holdings Group as a whole,and proposes the need for enterprise value assessment for New City Holdings Group.The residual income model will be reintroduced,and based on the basic principles of the residual income model,the advantages and disadvantages of the model will be analyzed,and the residual income model will be improved according to the limitations of the residual income model,and the improved residual income model will be obtained and implemented;the five key parameters of the residual income model are then analysed and estimated on the basis of the available financial data and then incorporated into the improved residual income model the results of the valuation of New City Holdings Group were obtained and the valuation results were compared with the carrying amount in the company’s financial statements and it was found that the residual income model is more accurate in estimating the market value of the company;a sensitivity analysis was then carried out,starting with a single factor sensitivity analysis,examining the key parameters of the residual income model and selecting three key parameters with sensitivity coefficients to determine whether they are more accurate;then a sensitivity analysis was carried out,starting with a single factor sensitivity analysis,examining the residual income model and selecting three key parameters with sensitivity coefficients to determine whether they are more accurate;then a sensitivity analysis was carried out,starting with a single factor sensitivity analysis,examining the residual income model and selecting.