Domestic Companies Listed On Gem Business Valuation Methods And Their Empirical Research

On October 30,2009, with the GEM officially launched in the Shenzhen Stock Exchange, China's GEM finally had been kicked off. This not only marks the maturity of China's capital market, but also opens up new investment channels for China's securities investors. With the rapid growth of GEM, its conduct business valuation has generated a huge market demand. However, GEM has just on the initial stage, and our enterprise value in the assessment on GEM still has not really started, so it has not yet formed a complete and mature theoretical system. Through a introduction and comparison of the current enterprise value assessment methods, this article firstly gets that discounted equity cash flow method caters to GEM's current situation, and then forecasts the cash flow of GEM listed companies by using three-stage model, so that get the value of listed companies, at last make a comparison with the stock market price. In order to develop and improve the GEM companies valuation methods, this paper conducts research by using combined method of quantitative analysis and qualitative analysis, theoretical analysis and case study. The main contents include:(1)Introduction and contrast of the existing business valuation methods: Based on the discussion of the GEM and its features, it introduces characteristics and applicability of current various methods of enterprise business valuation which shows the existing difficulties in choosing and using the enterprise value appraisal methods of our GEM Listed companies, and draws a conclusion that discounted equity cash flow method is comparatively more suitable for enterprise evaluation on GEM.(2)Enterprise value assessment of GEM companies:Firstly, it discusses the current special environment of GEM market, and in such background, it adjusts the original financial data, then it forecasts the sales revenue according to the existing financial data. Finally, it adopts discounted equity cash flow method to estimate enterprise value of GEM companies.(3)Empirical research:The first listed company of GEM, TGOOD is taken as an example in applied research of enterprise value appraisal method. During the business valuation process, it repeatedly uses quantitative analysis tools. First of all, it adopts trend extrapolation to predict sales revenue of the first phase.Sales revenue of the second phase is forecasted according to the states'planning documents in the related industries. The third phase is the stable development stage, which is predicted on the basis of China's macroeconomic growth. Finally, from the perspective of qualitative analysis, it researches reasons of valuations deviation.(4)Conclusion and outlook:It sums up the significance of this research, existing problems and areas to be improved.