Study On The Enterprise Value Assessment Approach Of Trust Company

With rapid development of trust industry, it has become one of four pillars in Chinese financial industry. As China Banking Regulatory Commission relaxes listing police towards trust enterprises, many trust enterprises explore ways to come into market in order to promote their development, thus evaluation becomes a necessary step on the way to be listed. Based on a view of related evaluation theories, this text takes Shanxi International Trust Co., Ltd. as an example to study trust enterprise intrinsic value and market value relationship, at this point, explore problems existing in trust enterprise evaluation process and put forward pertinent opinions.In view of the researched issues above, on the basis of literature review of related asset evaluation methods, this text selects Shanxi International Trust Co., Ltd. as a case of study and evaluates its assets by free cash flow discount model from earning method. Firstly, combine the characteristics of trust enterprises to adjust the predicted free cash flow, then determine discount rate by capital asset pricing model and weighted average cost of capital pricing model and finally conclude the enterprise value of Shanxi International Trust Co., Ltd.. This text regards appraised value as intrinsic value. Through comparing final appraised result by earning method with market value dated December 12 in the year of 2015, it is found that enterprise market value is approximately 50% more than intrinsic value. After analysis, it is considered that the reasons are as follows:first, capital market is not mature and more speculative, so the total market value cannot accurately reflect enterprise value; second, private placement and rational shares with stock bonus and dividend by enterprises before base date of assets evaluation will make influence to stock price.This text reveals differences between appraised value and market value of financial enterprises and points out reasons, which provides adjusted angles for trust enterprises to evaluate asset, this is one side of the text realistic meaning. On the other side, this text reminds investors should consider both expect from market to enterprises and enterprise intrinsic value. In view of the above, this text proposes that establish trust industry database in purpose of making appropriate models when analyze trust enterprise risks and lay a foundation for further positive research.