Autowell Enterprise Valuation Based On The FCFF Method

The prospect of photovoltaic,lithium and semiconductor industries are promising.In terms of the photovoltaic industry,the proportion of non-fossil energy consumption in the three years of 2025,2030 and 2060 will continue to soar according to the "three-step" roadmap of the carbon peaking and carbon neutrality goals,and finally reach the target of 80% and beyond.Because of the help of the photovoltaic industry in realizing the "dual carbon goals",the future of the industry is expected to continue the momentum.As for the lithium battery industry,the New Energy Vehicle Industry Development Plan(2021-2035)specifies that by 2025,new energy vehicle sales will reach about 20% of the total sales.The rapid development of new energy vehicles will inevitably generate a strong demand for lithium battery production equipment.In terms of the semiconductor industry,with the rapid development of 5G,industrial Internet,Internet of vehicles and other emerging industries,there will be an increasing demand for various types of low-power consumption,small-size advanced packaging chips,which provide a huge potential market space for the high-quality development of China’s semiconductor industry.Autowell mainly focuses on the research and development,production and sales of advanced equipment,including the hot sectors of photovoltaic,semiconductor and lithium,and it remains an enterprise with the largest increase during the three years of opening of the science and technology innovation board.This paper aims at evaluating Autowell’s enterprise value and analyzing whether its enterprise value can be supported theoretically.Firstly,this paper explores the origin of enterprise value evaluation theory,previous studies on evaluation methods and the application of main evaluation methods,and explains the four main evaluation methods of enterprise value,namely the cost method,the income method,the market method and the real option method,as well as their main evaluation models.Secondly,In order to select a relatively appropriate evaluation model and to further understand the internal and external conditions of Autowell,this paper analyzes the political,economic,social and technological environment of Autowell and introduces the major equipment involved in photovoltaic,lithium and semiconductor industries,the recent development situation and future development trend of the above three industries,and analyzes the fundamentals and financial situation of Autowell.Thirdly,this paper then chooses the two-stage model of free cash flow among the cost method,the income method,the market method and the real option method to evaluate the enterprise value of Autowell according to the internal and external conditions of Autowell.Last but not least,when applying the two-stage model of free cash flow to evaluate the enterprise value of Autowell,the revenues of photovoltaic,lithium and semiconductor sectors are predicted respectively according to the industry layout of the enterprise.The cost,depreciation and amortization,working capital and capital expenditure are analyzed and predicted to obtain the future free cash flow of Autowell.The discount rate is calculated according to the weighted average cost of capital and the enterprise value of Autowell is obtained.The evaluation results are compared with the stock price on the evaluation date,and the difference between the two is found to be acceptable.The calculated enterprise value of Autowell can be supported theoretically.By evaluating the enterprise value of Autowell,this paper proves that the FCFF model has a certain accuracy and applicability in evaluating the value of Autowell.Combined with the analysis and evaluation calculation process,this paper puts forward suggestions to improve Autowell’s own value,and at the same time provide referential value to investors and professional equipment manufacturers for them to enter the capital market in the future.