Listed Companies Of China's Electric Power Industry Valuation Methods

Understanding the value is a foundation of all the economic and managerial actions. Corporation Value Assessment as an integrated discipline that involves accounting, finance, economics, business strategy, company finance, industrial organization, and other related concepts. Knowledge of how these contents get together can solve the existing deficiencies on this topic and play a positive role in future development, which infers to further build Value Assessment System, to improve a various of assessment models, to coordinate comprehensive financial information, to grasp the overall corporate governance structure. So propelling reform from the point of the view "value", we should be aware of value investment in training to arouse rational investors. Because it has now become the subject of much concern.In many areas of investment, power industry is a basic industry with natural monopoly character. At present, our power industry has been in a process of reform from the natural monopoly to the orderly competition. The profitability will continue to be compressed, and the reform process is certain of a considerable investment opportunities. Meanwhile, it is expected that power supply would fall short of demand in the next two years and the secondary sector especially the industry would continue to be the main force of the power demanders. As the power investment has further increased, our capital market will be increasingly concerned about listed companies in the power industry. Under such circumstance, Corporation Value Assessment of the listed companies in China Power Industry has seemed particularly important.This article quoted the classic theory, literature survey, case analysis and empirical method to study the application of corporate valuation. It selected the angle of the listed companies in domestic power industry on the basis of summing up the theory systematically. After a series of qualitative analysis, author focused on the discounted cash flow method to assess the value of company in general way and applied it to valuation assessment practice in China Yangtze Power Co., Ltd.. Next, author used empirical data to evaluate the applicability of Discounted Cash Flow Method and have the conclusion that using FCFF as the main model and FCFE as the auxiliary model is a better way to assess power company's intrinsic value. At the same time, author also induced the general characteristics of power industry valuation. To some extent, this article provided investors with a objective and efficient assessment. It has a certain degree of practical significance.