A brief analysis of market value and investment value in asset evaluation

Update time: 2013-1-31 13:37:30 Author: Feng Jinlong Article source: Enterprise Herald 2012 21 Issue

Article Introduction: Abstract Market value and investment value both play an important role in the value types of asset evaluation, especially in corporate mergers and acquisitions. This article intends to start from the connotation and different situations of market value and investment value, and briefly discuss and analyze the difference between market value and investment value based on the "Xuejin Myth". Keywords market value; investment value; value type 1. The connotation of market value and investment value Value type, also known as value connotation, is the value attribute and form of expression of asset evaluation results. "Guiding Opinions on Value Types of Asset Assessment" (Asset Appraisal Association 2007

Abstract Market value and investment value both play an important role in the value types of asset assessment, especially in corporate mergers and acquisitions. Look. This article will start with the connotation and different situations of market value and investment value, and briefly discuss and analyze the difference between market value and investment value based on the "Xuejin Myth"

Keywords market value. ;Investment value; Value type

1. The connotation of market value and investment value

Value type, also known as value connotation, is the value attribute and form of expression of asset evaluation results. Article 2 of the "Guiding Opinions on Asset Appraisal Value Types" (promulgated by the Asset Appraisal Association in 2007) clearly states: "The asset appraisal value types referred to in this guidance include market value and value types other than market value." Among them, market value. Type refers to the estimated value of the valuation object when the buyer and seller on the valuation base date conduct fair transactions based on rational judgment and complete voluntariness; and value types other than market value include in-use value, investment value, residual value, Liquidation value, etc. Among them, investment value refers to the estimated value of the evaluation object for a certain type or specific investor with clear investment objectives. For example, the value of the acquired enterprise in corporate mergers and acquisitions can be divided into market value and investment value. Type: Market value refers to the amount of value that is assessed when the buyer and seller of a voluntary transaction conduct fair and normal transactions on the basis of the valuation date, assuming that the acquired enterprise continues to operate in accordance with the existing operation and management strategy; while the investment value is Refers to the assessed value of the acquired company under the condition that the merging company takes into account its own specific synergy effects and management strategies.

2. Market value and investment value under different circumstances

In the field of asset valuation, especially in corporate mergers and acquisitions, the same assets are likely to have different values ??due to differences in investors. The value types of corporate values ??under different circumstances can be briefly summarized as follows: (1) When investors have different motivations for mergers and acquisitions, the type of value they use to evaluate the acquired company will be different. For example, when investors mainly want to obtain the future profitability of the acquired company, the evaluation value used is mostly investment value; When the main purpose is to obtain the resources of the acquired enterprise and there is a comparable fair market value, market value is often used at this time. (2) When the client is a different stakeholder, the value type of the acquired enterprise will also be different. For example, when the subject of mergers and acquisitions is a certain type or specific investor, and only combines its own economic characteristics and unique evaluation data during the evaluation process, registered asset appraisers often choose the investment value as the evaluation value; on the contrary, , if there are no specific investors, the acquired company can search for potential mergers and acquisitions through various public channels. At this time, in order to present a fair value information to the public, the acquired company can entrust a professional asset appraisal agency according to the Asset evaluation is carried out under the condition that the enterprise's current operation and management strategy continues to operate, and the value at this time is often the market value in the open market.

3. Brief analysis of the difference between market value and investment value

Since different circumstances, especially corporate mergers and acquisitions, may lead to the emergence of differences between market value and investment value, So what is the root cause of this difference? The author believes that the most fundamental reason is the different strategic visions and value judgment standards of different clients for the same enterprise. This is most obviously reflected in the merger myth of Sejin Beer. In the "Suejin Myth", the total assets of Sewjin Beer before the equity transfer were approximately 1.14 billion yuan, and the owner's equity was approximately 520 million yuan. The net assets of Sewjin Beer assessed by the asset appraisal agency were approximately 618 million yuan. , and in the end the Belgian InBev Beer Group successfully acquired it at a price of 5.886 billion yuan. Faced with this nearly 10-fold difference, it is not difficult to find the reasons as long as we carefully analyze the actual situation of all parties at the time. In this "myth", InBev Group's corporate value assessment of Sedin Beer fully considered the value impact of Sedin Beer's goodwill, trademarks and other intangible assets, and saw that Sedin Beer had domestic sales at that time The good prospects that the network and market share can achieve under the combined effect of InBev Group's own capital and technological advantages, that is, InBev Group is more based on its own strategic development vision for the Chinese beer market and the synergy after mergers and acquisitions The strategic decision is made based on the value judgment of the effect; and the net assets of Sedin Beer obtained by the evaluation agency do not include Sedin Beer’s goodwill, trademark and other values. Under this merger and acquisition transaction, InBev Group used the investment value to evaluate Sedin Beer based on its own specific strategic purposes, while the evaluation agency chose the market under open market conditions to evaluate Sedin Beer's corporate value. value.

In short, based on different strategic visions and value judgment standards, different entrusting parties are likely to have huge differences in investment value and market value when faced with the value evaluation of the same enterprise, and the two values ??are different. Comparable. Therefore, we cannot directly say that the market value is undervalued because the market value is much lower than the investment value, because the synergy effect after mergers and acquisitions promotes the expansion of the difference between investment value and market value, and this huge difference will in turn promote mergers and acquisitions. Fang pursues post-merger synergies. In practice, we must carefully understand the respective meanings of the two values ??and not look at the problem one-sidedly.

References

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