The Merger And Reorganization Of Listed Companies Valuation Correction

With the rapid development of capital market,mergers and acquisitions activities become more frequent.The United States has relied on M & A to lay the leading position in the global economy,and now China's economy is rising,leaping the world's second largest economy only to the United States.As the core of merger and acquisition reorganization,the rationality of the results directly affects the success or failure of the merger and acquisition and reorganization of the company,so the value of the M & A is accurately estimated,which makes the interests of both parties have not been damaged,and the merger and reorganization agreement will be finally reached.Therefore,in both academic and practice,the valuation research perspective of M & A focuses on the valuation of the M & A,and few scholars or practitioners change the research angle of M & A to the valuation of companies after merger and acquisition.However,the valuation of the company after M & A can not only test the benefit of the company's merger and reorganization activities,but also provide the decision basis for the investors to choose whether they will continue to invest.It has certain value for the research on the company valuation after M & A.As a typical case of merger and reorganization in China's capital market,CSR and CNR merger has a good expectation for the future development of the merger,but it is very bad to see the trend of the stock price after the merger in China.This raises doubts about the true value of China's central cars after the merger of CSR and CNR.Is the value of CRRC overestimated after the merger? With this question,the paper then analyzes the research on mergers and acquisitions valuation at home and abroad.The domestic and foreign scholars have gradually formed three kinds of methods: discounted cash flow,relative valuation method and option valuation method,and these methods are still applicable to the company valuation after merger and reorganization.Based on these methods,many scholars have derived,expanded or improved amendments to estimate the value of the company better.In addition,scholars at home and abroad have shown that the merger valuation will be affected by the merger and acquisition and the external environment,and the M&A party will often pay a certain premium for another,and the merger premium will lead to the fall of the stock price after the merger and reorganization.After a certain theoretical basis,the paper demonstrates the rationality of using discounted cash flow method to estimate the CRRC after the merger of CSR and CNR.On the basis of discounted cash flow method,the cash flow in the method model is combined with the size of the company,the market share and the financial situation after the merger of CSR and CNR.And according to the situations,the cash flow,discount rate and growth rate are corrected.First of all,the paper assumes that after 5 years after the merger,the CRRC enters a stable growth stage,and selects the historical data of 2010-2016 years of CSR,CNR and CRRC as the basis for predicting the 2017-2020 year future cash flow,and calculates the future free cash flow of 2017-2020 in CRRC after the merger,calculating 2016-2020 revised free cash flow with the research and development cost capitalization.Secondly,the paper uses the CAPM model to calculate the cost of equity capital of the CRRC after the merger,then using WACC model to calculate the weighted average capital cost of CRRC,which is the discount rate of CRRC after the merger of CSR and CNR.Finally,the estimation paper on the sustainable growth rate does not directly adopt the historical growth rate before the merger of CSR and CNR and the United Nations world economic growth rate.On the basis of the contribution rate of the regional operating income of CRRC after the merger,the growth rate of CRRC can be predicted in the normal situation after the merger,and then the future development of CRRC after the merger is divided into three cases,which are normal,optimistic and pessimistic,and the three situations are carefully analyzed.Based on this,we can give certain weight to three situations,and calculate the weighted average growth rate of CRRC after the merger of CSR and CNR.After amending the three indexes of future free cash flow,discount rate and growth rate of CRRC after the merger,it was brought into the revised discounted cash flow model and calculated that the stock price of CRRC was 18.45 yuan after the merger of CSR and CNR,and the average trading price of CRRC after the merger of CSR and CNR was 17.43 yuan from merged back to the end of 2015.As a criterion,the revised discount cash flow model is used to estimate the stock price of CRRC after the merger of CSR and CNR is 1.02 yuan higher than the average trading price,and the valuation deviation is 5.87%.The paper further analyzes the value of the CRRC after the merger of CSR and CNR by the traditional discounted cash flow method.The estimated combined CRRC stock price is 16.17 yuan,the valuation deviation is-7.23%.It can be seen that the modified discounted cash flow method CRRC upward revision of CSR and CNR combined value.If the valuation deviation rate is used to estimate the value of the CRRC after the merger of CSR and CNR more reasonably,the revised discount cash flow method is more reasonable for the CRRC after the merger.