The Research On The Enterprise Valuation Based On EVA In Hunan Investment Group

As the socialist market economy in our country constantly improved, and the State-owned economy's position in the national economy gradually increased, the State-owned enterprises play a crucial role in economic stability and development.Central governments and local governments perform the contributor's duty, This allows the State-owned enterprises to have superiority in acquiring resources and funds over other economic units. However, it also results in waste of capital value, low efficiency of using resources and flaw of corporate governance.Establish and improve the State-owned enterprises evaluation system, is an important means for the implementation of the responsibility for maintaining and increasing the sate-owned assets, and also is the main content of the SASAC's legal duty as the contributor.The concept " EVA " (Economic value added) which was brought forward by Stern Stewart &CO. in 1990s, takes the use-cost of equity capital into consideration creatively, and puts forward the idea of compensated use of equity capital. The core concept of EVA is creating shareholder value,which is means to create more wealth for investors. This value orientation is completely consistent with the goal of state-owned assets management system reform in our country. Since 2010, SASAC is fully implementing the Economic Value Added instead of Return On Equity as the annual performance appraisal indicators. EVA accounts for 40 percent of examination index.This thesis is a study on the enterprise valuation based on EVA in Hunan Investment Group, by not only combining the theoretical research method with the case analysis method, but also combining the quantitative analysis method and the qualitative analysis method. First, this thesis compared value evaluation model of EVA with traditional evaluation methods, found that EVA is the better method to evaluate the value of the Hunan Investment Group, as only one public listed company directly managed by Changsha government.Than, use the EVA model, which is a new type of enterprise value evaluation model combined EVA with the Discounted Cash Flow, to evaluate the value of Hunan Investment Group. We found that the intrinsic value is 3236 million yuan. Finally, arrive at the conclusion of the case studies, case studies should pay attention to the revelation of the management and the problem of EVA model applications.