Case Analysis Of ZTE Equity Valuation

In recent years,domestic and foreign financial market have been up and down.Large scale mergers and acquisitions emerge in an endless stream.At the same time,with the development of science and technology,financial products and investment platform become more and more.In short,the financial environment is more complex.In this context,we should pay more attention to the choice of investment.However,how to evaluate the value of commodities is an urgent problem for many investors.Manufacturing industry is the pillar of national economy,communications equipment manufacturing sector is an important part of the manufacturing sector.In addition,ZTE corporation is a typical representative of communications equipment manufacturing sector.Therefore,this paper takes ZTE as an example to make stock valuation,using case study method and literature research method.This paper first introduces the method and theory of value evaluation,analyzing the meaning,characteristics and application scope of each method.Then introducing the basic situation of ZTE and its industry overview,on this basis,we understand its financial situation from the solvency,profitability and operating capacity.Finally,using the discounted free cash flow method to assess the value of ZTE's equity,and we get a more positive result than market transaction price.When calculating the free cash flow of ZTE,we distinguish ZTE's assets and liabilities according to financing angle and managing angle.ZTE is a communication equipment manufacturing enterprises,the creation of value is in the product and factor markets.Therefore,such approach enhances the accuracy of free cash flow.At the same time,ZTE is a high-tech enterprises and it faces greater market risk.Consequently,based on the characteristics of ZTE,this paper takes the time-varying characteristics of ? into account when using CAPM model.The research results of this paper can be used as reference for the value evaluation of the communication equipment manufacturing industry.It is helpful to improve the management efficiency and help investors to make correct investment decisions.