Valuation Of ZTE Company

In the recent years, large acquisition activities in stock, futures and firms had been observed to increase in worldwide economic environment. The core of these activities is the true value of a firm. Hence, accurate evaluation of a firm's true value and analysis of the relationship between company value and company's market price have become the premier concern of all entrepreneurs and venture capitalists.The thesis shall discuss the evaluation of ZTE's value with case studies qualitatively and quantitatively. Macroscopic economic and business environment is firstly studied with comparison of the competitiveness of ZTE in overseas and domestic markets. Secondly, base on financial data, this thesis analyze financial ratio to gain ZTE's financial profitability, growth capacity, solvency and operational capacity. Then, after comparative analysis on likely valuation models, the thesis chose the FCFF(Free Cash Flow of Firm)model to evaluate real value of the company.Finally,we gain the result that value of ZTE`s equity is 34.64 yuan per share while share price is 29.86 yuan,which prove the validity of the analytical results.Finally, by study on valuation of ZTE, this thesis combined theoretical analysis and case analysis to find out applicable model to value Chinese tele-communication company and be a reference for investor and manager.