Research On The Valuation Method Of China 's Comprehensive Internet Enterprise

With the rapid development of China’s Internet industry, the Internet and the impact of business activities in the capital markets have become increasingly frequent, acquisitions, mergers, market, restructuring and other capital operation is also increasingly becoming the norm. A great majority of Internet companies are growing very fast and holding advanced technology and a new profit model,with the characteristics of high growth and high-risk. How to assess the investment value of Internet companies have become stock investors focus on the issue. However, the assessment process of Internet companies are different from the traditional enterprise,because the earnings of Internet companies are highly uncertain and historical data and market data are scarcity. Therefore, it is more and more important and urgent to conduct a reasonable valuation for Internet companies and determine a scientific and effective evaluation system.In this paper, several commonly used valuation method including absolute and relative valuation methods, have been described in detail. And we summarize the existing valuation methods of Internet companies,and make a further discussion of difference between Internet companies and general enterprises in assessment methods selection and indicator choices,and proposed the advantages and limitations of various methods and indicators. Meanwhile, the paper selects the most representative of integrated Chinese listed Internet companies-Tencent as cases, to research methods valuation of Internet companies, and discuss its results.The paper has analyzed the external characteristics and financial characteristics of Tencent and conduct SWOT analysis.The value of the case companies were actually assessed. We selected three methods to assess enterprise value of Tencent in2013,including EVAModel, DCF Model and P/EModel,and make the comparative analysis. By EVA Model, you can get the2013Tencent’s share price of HK$288.46, DCF outcome of HK$246.29, P/EModel the outcome of HK$208.72-250.69. And, Tencent’s closing price of approximately HK$307.80from May to July2013. EVA assessment model are closest.By comparing and analyzing the final valuation outcome of Tencent form several evaluation methods, EVA model has obvious advantages, but its actual operation is more complex.So,DCF and P/E are more popular.