The Target Company Evaluation Based On The DHGF Integration Algorithm

Recently our country enterprises merger and acquisition activities are becoming more and more frequent.And the year of 2015 set a new record in the amount of our country enterprises’ merger and acquisition activities. According to the Securities Daily news, our quoted companies’ overseas acquisitions arrive a total of 182 cases, including four deals’ total dimension more than 10 billion yuan; And Thomson Reuters news shows that the total amount of mergers and acquisitions in China are as much as $568.8 billion,and the Chinese M&A “Hormone Index” soared. In the called for state-owned enterprises reform and enterprise restructuring, merger integration between our country enterprises will affirmatively become the new trend of 2016. M&A takes the transaction of property right as a mean to realize the resource optimization and the restructuring of control. Its’ main purpose is to seek more say in the international and domestic market.Enterprise’s acquisition are from the good expect of the value of target enterprise, but error evaluation will result in failure of acquisition, the loss of acquisition enterprise assets and be harmful to the sustainable and good development of the enterprise. Especially in the current reform of state-owned enterprises, resolving the excess capacity, the merger and acquisition of state-owned enterprises in our country, private enterprises’ error evaluation will cause the loss of state-owned assets, and be damage to the nation’s assets. As a vital part of the whole acquisition activity,using appropriate evaluation method, comprehensively and scientifically evaluating the target enterprise is particularly important.Merger and acquisition is an activity dreaming to improve the comprehensive capacity of enterprises, having access to the resources using for expanding, that an enterprise under the action of market mechanism takes certain economic ways to obtain one or several enterprises part or all of the property rights, and realize the operating activities. The acquired company is called the target enterprise. Tang Wan ming think that the value of target enterprise include intrinsic value, strategic value and synergy value.This paper argues that strategic value also includes the synergy value, therefore, that target enterprises’ value are the total value of the enterprise, including intrinsic value and strategic value. And the evaluation method has shortcomings to some extent, therefore in my study, introducing the DHGF comprehensive integrated algorithm to speak the value of target enterprise.Based on fully understand the importance of target enterprise value assessment in acquisition and related concepts, using the DHGF comprehensive integration method to the enterprise value. The article includes the following parts: the first part narrates the writing background and makes a general introduction to the full text of the research background, research purpose, significance and the innovation of this article; In the second part, first of all, the activity of merger and acquisition and target enterprise’s value are introduced, and defined the value of target enterprise value as its overall value, considering its strategic value and intrinsic value. And then analyzes the meaning of the target enterprise evaluation.Through introducing the existing target enterprise value evaluation method of market comparison method, discounted cash flow method and adjust the book value method, analyze the shortcomings and deficiencies, as the opportunity to introduce the DHGF algorithm; The third part details the scope and the origin of DHGF algorithm, analyzes on the applicability of the target enterprise value evaluation, and determines the feasibility and advantage using this method in evaluation. Then the evaluation process are introduced.The DHGF algorithm is a comprehensive integration algorithm that combines the Delphi method and analytic hierarchy process(AHP) and gray theory and fuzzy mathematics,and it makes the combination of qualitative and quantitative, the combination of man-machine,and the combination of scientific theory and practice experience.In this way the four method can play to their respective advantages,and improve the science of decision; The fourth part applies the DHGF algorithm in the case of Hisense merger Kelon. In the value selection,they can choose the more accurate point, for mergers and acquisitions party clearly knows the value of the bottom line.Using DHGF algorithm to evaluate the enterprise value of Kelon, and making compare with the real situation to test and verify the reliability of the DHGF in the valuation of M&A;Finally is the full text of the summary, illustrating the limitations and deficiencies of this article, looking forward to further research.Research methods of this article mainly are the literature retrieval method, comparative method, simulation method, quantitative analysis and method of system science, through query of the Internet, consulting relevant literature and systematically evaluating object, hoping to be able to objectively reflect the real problems of original appearance,and accordingly analyze the DHGF algorithm applied in the target enterprise value evaluation of feasibility and applicability are analyzed in detail, through the study of this article,in order to improve evaluation methods and make a little contribution within our capabilities.