The Research Of Valuing Unlisted Companies In Garden Industry For Private Equity

Garden industry has great potential and is full of investmentopportunities. But, as the industry just attracted people’s attention in thelast three years, most investors do not have a clear picture of its variousspecial feature, they still use old methods in valuation. Based on thefeatures of garden industry, the thesis introduced an innovative valuationmethod which is applicable for private equity to the investment inunlisted garden companies. Firstly, after analyzing the industry featureand the operational and financial risks, the thesis points out thedrawbacks of three classical valuation methods when used in valuinggarden companies, concluding that these three methods cannot be used ingarden industry if no adjustment is made. Secondly, the thesis makessome adjustments to the classical Price/Earning method to create a newvaluation method applicable to garden industry. Last, the thesisperforms a case study to verify the new valuation method. Three listedgarden companies are set for the case, three specific dates just close totheir IPO dates are set as the valuation date. The new method is used toget the companies’ valuation. After comparing with the actual IPO price,the thesis concludes that the new method is reasonable and reliable.