The Analysis Of Investing Value On SDIC Power Based On EVA Model

In recent years, the capital market system construction of China took a significant progress. Especially the fundamental problem-reform of non-tradable shares-which fazing the capital market system will be solved basically in 2006. It enables the market to have fundamental transformation. How to appraise public company's actual value? Not only it is an important topic searched after long-term by securities business, but also it is the investors' most concerned issue under the mature market environment day by day. Providing a feasible method to solve this problem is this paper's purpose.EVA model was established initially by a U.S. consultant firm Stern Stewart in the 1980s. Its two biggest merits lie in two points: one is the consideration of Equity Capital Cost of estimating company management achievements, embodying the principle of the paying use for stockholders' capital;the second is proper adjustment on income statement and balance sheet, removing the distortion of different account dealings on profit of after-tax and input capital value. The EVA model is company-value-estimating model based on EVA theory, which is used to evaluate company's value through forecasting annual EVA value.This paper focused on applied research on a company's evaluation with EVA model. It discussed the process of parameters-selecting and sub model-selecting on the course of using EVA model. Also, it suggested adjusting thoughts of EVA evaluation model on the special market environment in the present securities business, for example the existence of confined current stocks.The paper's viewpoint is that EVA evaluation model, which is a valid index for investing selection, could provide us an effective criterion for estimating a company's value. It should be integrated to be applied with other assessment methods because of its relatively complex operation. In terms of the top-to-bottom stock-selecting ideas, the paper analyzed management growth environment of the industry firstly, demonstrated the growth period of the power industry, and then picked out a relative well-done company-SDIC Power (State Development & Investment Crop. Power) (code 600886) with comprehensive evaluation indicators of management performance, evaluated the stock price of SDIC with EVA model, and was contrastively proved with Price Earning Ratio. It is considered that the investment value analysis methods based on a combination of EVA methods can increase the efficiency and effect of the stock-selecting work.It is the author's desire that this paper will offer some help to the investors who use the model.