ZTE Investment Value Analysis

This thesis fist introduces the ZTE background and the basic concepts ofvalue analysis model. Then it follows a top-down analysis method to analyzethe investment value of ZTE.In the analysis of the external environment, PEST analysis method is used.In the analysis of industry, five aspects are reviewed: the cyclical nature ofthe industry, the life cycle, the degree of concentration, the industry chainstructure and the competitive structure. During the analysis of corporatebehavior, the analysis of the enterprise competitiveness based on the size ofthe enterprise, strategic, technical capacity and management capabilities arediscussed. In the analysis of corporate performance, business and financialdata are forecasted based on financial date and analysis above.On this basis, absolute valuation method and relative valuation methodwere used to analyze the investment value of the ZTE. Discounted cash flow(DCF) method is used to estimate the net present value of the ZTE absolutevaluation. As to relative valuation method, price-equity ratio, price-bookvalue ratio, price-sales ratio is compared between ZTE and competitors, toevaluate relative investment value of ZTE.Finally, on the basis of the above analysis, ZTE investment value and thevalidity of the valuation models to be analyzed and summarized.