Research On The Enterprise Value Evaluation Of Returned Chinese Concept Stocks Based On The Residual Income Model

With the increasing number of Chinese concept stocks listed overseas,the problem of cross-border regulatory discrimination has become increasingly prominent.In particular,the promulgation of the Foreign Company Accountability Act and other laws in the United States has strengthened the strict supervision of Chinese concept shares,and many Chinese concept stocks have had to withdraw from foreign capital markets and return to the domestic market.However,the political and economic turmoil in recent years has brought environmental uncertainty to the return of Chinese concept stocks.Therefore,how to evaluate the enterprise value of the returned Chinese concept stocks is a practical problem worth studying.Based on the theory of information asymmetry,uncertainty theory and enterprise value evaluation theory,this thesis tries to answer the question of how to accurately evaluate the value of returned Chinese concept stocks company in the context of environmental uncertainty by using the improved residual income model.First of all,the thesis combs the literature of environmental uncertainty,Chinese concept stock’s recurrence,enterprise value evaluation and residual income model.Secondly,it introduces the residual income model,and improves the model from three aspects:(1)the Du Pont analysis method is introduced when calculating the residual income;(2)Using the P/E ratio to predict the residual income during the perpetual period;(3)When calculating the cost of equity capital,environmental uncertainty is taken into account and a specific risk coefficient is introduced.Finally,the improved residual income model is applied to a practical case to evaluate the value of the returned Chinese concept stock China Telecom.The thesis analyzes the factors affecting the value,and compares the results of the evaluation before and after the improvement of the model.It is concluded that the environmental uncertainty risk significantly affects the value evaluation of the returned Chinese concept stock enterprise.Meanwhile,the two results are compared with the average market value of the year before the evaluation benchmark date.It was found that the improved model evaluated results closer to market value,further confirming the accuracy of the improved model.The thesis provides a specific plan for the evaluation of enterprise value in the return of Chinese concept stocks,enriches the literature on the evaluation of enterprise value in the return of Chinese concept stocks,and also provides reference for how to consider environmental uncertainty and improve the residual income model.