Research On The Value Assessment Of Internet Companies

After 30 years of development,China’s securities market has played a significant role in promoting China’s economic structural adjustment and technological progress.Due to the relatively lagging development of China’s^financial system,a large number of domestic high-quality Internet companies have chosen to list overseas.Therefore,at present,high-quality Internet companies in the a-share market are relatively scarce,and Internet companies have a high premium level.Regulators are actively adjusting their strategy to establish a more reasonable pric:ing method for IPO,encourage the emerging industry which dominant by Internet companies to be listed in China.The Internet industry has the characteristics of fierce competition environment,rapid updating of products and large fluctuation of market value,and has raised higher requirements for investors than traditional industries.This article reviews some common value assessment theories such as income approach and market approach.After comparing the applicability of these valuation theories to the Internet companies,we choose the free cash flow discount method and the market rate method to do the valuation analysis.Letv was once a representative of blue chips in the gem.Its market value rose from 3 billion yuan at the beginning of the listing to 150 billion yuan at the peak of the bull market in 2015 and fell to 20 billion yuan after the debt crisis.By the time of the deadline,the market value of Letv was only 11 billion yuan.In the Internet company,its course of development is very representative.The valuation analysis of Letv will provide some certain reference value for the value assessment of other similar Internet companies in the future.In this article,by analyzing the business and financial statements of Letv,we predict the future bus:iness revenue and the free cash flow after debt crisis,and use the above methods to estimate its value.Through the analysis of the results of the evaluation of the value of Letv before and after the debt crisis,this article puts forward some constructive suggestions on how to value the Internet company more accurately.