Research On The Value Evaluation Of Chip Design Enterprises Based On FCFF Model

The development of the chip industry is changing with each passing day.As a cutting-edge technology industry,the support of our country for the chip industry is also increasing.Especially after being sanctioned by the United States and other western countries,the country takes the chip industry as the focus of national economic and technological development.There are many types of chip enterprises in the chip industry.This paper will focus on the value evaluation of chip design enterprises in the chip industry.First of all,by combing the previous scholars' research on the value evaluation of chip enterprises,it is found that there are no scholars specializing in the value evaluation of chip design enterprises.After the research direction is established,the status of chip design industry and the characteristics of chip design enterprises are analyzed,which paves the way for the selection of evaluation model.By analyzing the applicability of the three traditional methods of enterprise value evaluation to the chip design enterprises,it is found that the income method is more suitable for the value evaluation of the chip design enterprises,and the more commonly used FCFF model is selected to evaluate the value of the chip design enterprises,and Rockchip company is taken as a case to verify the applicability of FCFF model to the chip design enterprises.This paper selects Rockchip company as the case study object,analyzes its operation status from the aspects of product type,operation mode,sales mode,industry status and competitiveness,and analyzes its financial status from the aspects of operation ability,solvency and profitability.On the basis of fully understanding the evaluated enterprises and combining with the industry situation of chip design industry,the paper forecasts the operating revenue,operating cost and other financial indicators of Rockchip company.In the process of forecasting,the natural growth rate method and sales revenue percentage method are mainly used.After predicting the indicators,calculate the free cash flow of Rockchip company,and finally get the equity value of Rockchip company by discounting the cash flow.Comparing the closing price of the first day of listing two months later,we find that the gap between the evaluation result and the closing price is small,which shows that FCFF model is more suitable for the value evaluation of chip design enterprises.On the basis of fully understanding the enterprises to be evaluated,we can make a reasonable evaluation of the market value of chip design enterprises.Although FCFF model is a better method to evaluate the value of chip design enterprises,it also has some disadvantages,such as the difficulty of business income prediction,subjectivity and tedious operation of item,which will affect the feasibility of FCFF model.Limited by the limited ability and energy,this paper does not make too deep discussion,which is also the deficiency of this paper.