Value Evaluation Of Chint Electrics Based On Discounted Free Cash Flow Method

Facing the fierce international competition,the country proposes the strategy of “the powerful manufacturing country 2025” and “going out”,emphasizes the guidance of "innovation drive,quality first,green development,structural optimization,and talents based",promoting the structural adjustment and upgrading transformation of the manufacturing industry,helping large data,EPC system network and cloud computing merged with the traditional manufacturing industry,encouraging manufacturing to strengthen research and innovation and master core technologies,indicating the development direction of manufacturing,and creating good environment for manufacturing enterprises.As the leading enterprise in low voltage electrical apparatus industry,Chint Electric entered the photovoltaic field in 2016,in the crucial period of industry transformation and merger and acquisition integration,carrying out the value evaluation is helpful for Chint Electrics to predict the development trend,optimize the company’s operation and management policies.At the same time,it is necessary for shareholders and potential investors to better understand the inherent value of the enterprise and make investment decisions.The paper takes the value evaluation of Chint Electrics as the research object,the general situation,core competence and financial status of Chint Electrics will be described.Then the paper analyzes the adaptability of the discounted free cash flow method in the research of Chint Electrics,according to the discounted free cash flow method,the future cash flow’s stage of earning can be divided into forecast period and subsequent period,based on the analysis of the prior performance from 2014 to 2018,forecasts the free cash flow in the future,analyzes and forecasts the discount rate through the cost of debt capital,equity capital and weighted cost of capital,the final result can be obtained by calculation.The rationality analysis of valuation result will be finished by P/E ratio and stock price.Through the sensitivity analysis of parameters,identify and analyze the sensitive factors that affect the value,and puts forward the corresponding solutions.The paper provides reference to value evaluation,improve the efficiency of asset operations,strengthen value management and adjust the management strategy in the future.