Advances in Economics, Management and Political Sciences

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Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 36 , 10 November 2023


Open Access | Article

Analysis of Huaxing Yuanchuang M&A Based on PEG and EVA Valuation Model

Kaman Cheong 1 , Fanrui Guo 2 , Jinshi Lu * 3
1 Central University of Finance and Economics
2 Xi'an International Studies University
3 South University of Science and Technology

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 36, 53-65
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Kaman Cheong, Fanrui Guo, Jinshi Lu. Analysis of Huaxing Yuanchuang M&A Based on PEG and EVA Valuation Model. AEMPS (2023) Vol. 36: 53-65. DOI: 10.54254/2754-1169/36/20231785.

Abstract

In the process of expanding operations, enterprises often encounter bottlenecks in terms of capital, technology, management, and other aspects. In order to tackle these problems, enterprises often choose to issue bonds, go public, mergers and acquisitions, etc. to expand their production and business scope, update management models, and improve their competitiveness. Due to the short introduction of the merger and acquisition mechanism, the analysis and research of mergers and acquisitions by various enterprises are relatively shallow, and the success rate of mergers and acquisitions by Chinese enterprises is low. This study conducts a research and analysis on the first merger and acquisition case on the Science and Technology Innovation Board, i.e., the case of Huaxing Yuanchuang's acquisition of Olyto. Based on PEG and EVA valuation models, it analyzes the motivation and results of Huaxing Yuanchuang's acquisition of Olyto's business behavior. By valuing and comparing the stock price of Huaxing Yuanchuang before and after the merger and acquisition behavior, the conclusion that the merger and acquisition behavior is not successful is drawn. Research has found that under the PEG valuation model, the stock price of Huaxingyuan Chuang after the merger is slightly overvalued, while under the EVA valuation model, the stock price is greatly underestimated.

Keywords

valuation analysis, mergers & acquisitions, science and technology innovation board

References

1. Sun, Y., Hou, L., Liu, J.: Cumulative Experience and M&A Performance: Learning from Success and Failure. Collected Essays on Finance and Economics 8, 69-80 (2021).

2. Huang, S., An, L.: Integration after Mergers and Acquisitions: Key Factors for the Success or Failure of Enterprise Mergers and Acquisitions. Business and Management Journal 15, 6-13 (2003).

3. Yuan, Z.: Research on the valuation of enterprises on the science and technology innovation board based on PEG method and EVA method. Dongbei University of Finance and Economics (2022).

4. Hu, X., Wu, Z., Huang, J.: Research on the selection of enterprise value evaluation method on the science and technology innovation board. China Asset Valuation 11, 4-7+33 (2019)

5. Yang, N.: Research on Risk Management and Control of Huaxing Yuanchuang's Acquisition of Olyto from the Perspective of Value Creation. Guizhou University of Finance and Economics (2022).

6. Wang, D.: A Case Study of HYC Technology Acquiring Olyto. Hebei University (2021).

7. Leng, F.: Case Study on M&A of the STAR Market. Jiangxi University of Finance and Economics (2022).

8. Wang, F.: A Brief Analysis of Equity Value Evaluation Methods of New Third Board Enterprises. Hebei Enterprises 3, 32-33 (2015).

9. Cheng, X., Fu, H., Zuo, B.: Research on capitalization of R&D expenses of high-tech enterprises. Friends of Accounting 5, 37-43 (2016).

10. He, Y.: Application of high-tech enterprise value evaluation based on real options. Chongqing University of Technology (2017).

Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-093-6
ISBN (Online)
978-1-83558-094-3
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/36/20231785
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated