The growth of joint-stock companies is an important reference factor for stock investors to choose investment targets. Therefore, it is of great significance to study the growth elements of joint-stock companies and quantitatively analyze the influence of the changes of each element on the intrinsic value of the company's stocks.
Usually, the indicators that reflect the growth of a company include the growth rate of total assets, net assets, main business, main profit and net profit [1]. The growth of total assets and net assets mainly reflects the company's reinvestment, which is the basis of the company's growth; The growth of main business and main profit mainly reflects the company's market development and product profitability, and more reflects the company's growth potential; The growth of net profit is a comprehensive reflection of the company's operating results, which can best represent the company's growth. Therefore, when studying the intrinsic value of stocks, the growth rate of net profit is generally regarded as an indicator of growth.
The growth rate of net profit is not only related to the profitability of assets, but also related to the investment of company assets. From the perspective of asset profitability, strong asset profitability leads to high growth of the company; On the contrary, if the profitability of assets is weak, its growth may be affected. From the perspective of the company's investment growth, the company's investment is divided into internal investment and external investment. Internal investment means that the company will not allocate all the profit funds and put them into reproduction, or allocate part of the profits and put the other part into reproduction. In this way, the company's assets will increase, which will definitely make the company more profitable and grow better in the future. Foreign investment refers to the company's raising funds from outside the company and increasing the company's assets through allotment and issuance of new shares. Because the amount of funds raised in this way is large and not continuous, this paper does not consider this factor.
Any industry has a life cycle, and a company cannot have strong long-term profitability and high growth. When an industry or a product has gone through a period of high growth, it has entered a period of stable development [2]. At this time, the company's rate of return is relatively low and its growth is relatively low. In order to facilitate the research, this paper divides the growth of the company into two stages, namely, the high growth stage and the normal growth stage. The main factors that affect the growth in the high growth period are the rate of return and the growth period; The main influencing factors of normal growth are yield and profit retention rate. Therefore, the rate of return in high growth period, the length of high-yield period, the rate of return in normal growth period and the amount of stable asset growth all affect the intrinsic value of the company's stock. Based on the above analysis, we can see that the main factors affecting the growth of joint-stock companies are: the size of the rate of return, the length of the high-growth period, and the profit retention rate (reflecting the proportion of capital investment or the growth rate of capital).
Second, the intrinsic value model of growth companies' stocks
Basic assumptions: the company has high returns and high growth in previous years, and does not pay dividends; Dividend after normal income and normal growth. The calculation formula of net capital per share of high-growth T-year joint-stock company is as follows:
kt = K0( 1+z 1)t( 1)
In which: Kt's net capital per share in year T;
K0 initial net capital per share (equal to net assets per share minus year-end profit);
Z 1 annual net return on capital in high growth period;
T high growth period.
The formula (1) reflects the net capital growth of the joint-stock company in T years before the high growth period. Because the annual return rate of net capital is Z 1, and all the income is converted into capital without distribution, the annual growth rate of net capital is Z 1 and the annual growth rate of profit is Z 1, that is, the growth rate of the company in the previous t years is J 1=Z 1.
The formula for calculating the discounted intrinsic value of unit net capital gains in normal growth period is as follows:
pt =( 1-S)( 1-L)Z2/(I-LZ2)(2)
Among them: the intrinsic value of discounted net capital gains per unit in the normal growth period of Pt;
S dividend income tax rate (currently 20%);
L normal profit retention rate;
Z2 Annual rate of return in normal growth period;
1. Market discount rate.
Formula (2) is the formula for discounting the intrinsic value of stocks with fixed growth rate, where: (1-L) is the dividend yield; (1-S)( 1-L)Z2 is the actual dividend after tax deduction; LZ2 is the annual income growth rate, that is, the company's growth in the normal growth period: J2=LZ2.
The formula for calculating the intrinsic value of stocks combined with high growth period and normal growth period is as follows:
P0=KtPt/( 1+I)t (3)
In which: P0 stock intrinsic value. (1+I)t is used to discount the value of T period to the beginning.
The above model is a segmented discount model [3], in which the former is the high growth of capital due to high returns, and the latter is the infinite discount dividend of the intrinsic value of stocks.
Thirdly, the influence of growth-related factors on the intrinsic value of stocks is analyzed.
If a company's high growth period is five years, the high growth period yield is 40%, the normal period yield is 15%, the profit retention rate is 20%, the net capital per share at the beginning of the year is 1 yuan, and the market discount rate is 6%, that is, K= 1 yuan, z1= 40.
Then the growth rate in the high growth period is J 1=Z 1=40%, the growth rate in the normal period is J2=LZ2=20%× 15%=3%, and the intrinsic value of the stock is P0 = ktpt/(1+I) t = 60.
This result shows that under the above conditions, when the normal growth rate is 3%, the stock with a net capital of 1 yuan has an intrinsic value of 12.86 yuan and a price-to-book ratio of 12.86 times.
On this basis, the following is to analyze the influence of various factors on the intrinsic value of stocks.
1. the influence of the change of high growth rate and yield on the intrinsic value of stocks
The change of high growth rate does not affect the change of normal growth, but affects the net capital, that is, the growth of capital, and then affects the profit and the intrinsic value of stocks. Table 1 shows the influence of high growth rate of return (referred to as high rate of return) on the intrinsic value of stocks when it is increased from 40% to 45% or decreased to 35%.
Table 1 Impact of high-yield changes
High growth period/year
45
40
35
Intrinsic value of stock/yuan
15.33
12.86
10.72
Rate of change in value/%
19.2 1
- 16.64
As can be seen from the table 1, the high rate of return is increased from 40% to 5%, and the intrinsic value of the stock is increased by1921%; The high rate of return decreased from 40% to 5%, and the intrinsic value of the stock decreased 16 64%. This shows that the change of high returns has a great influence on the intrinsic value of stocks, and the influence of rising is greater than that of falling.
2. Changes in the high growth period have the same impact on the intrinsic value of stocks as high yield, and also affect profits and the intrinsic value of stocks through the impact on capital growth. Table 2 shows the impact on the intrinsic value of stocks when the high growth period is extended from 5 years to 6 years or shortened to 4 years.
Table 2 Influence of high growth period change
High growth period/year
six
five
four
Intrinsic value of stock/yuan
16.98
12.86
9.74
Rate of change in value/%
32. 1
-24.2
Table 2 shows that if the high growth period is extended by 1 year, the intrinsic value of the stock can be increased by 321%; Shortening 1 year will reduce the intrinsic value of stocks by 24.2%, and the length of high growth period has a great influence on the intrinsic value of stocks.
3. The influence of normal rate of return on the intrinsic value of stocks.
Assuming that other factors remain unchanged, the normal rate of return increases from 15% to 20% or decreases to 10%, and the influence on the intrinsic value of stocks is analyzed. The specific results are shown in Table 3.
Table 3 Effect of income change during normal period
Output/%
20
15
10
grow
four
three
2
Intrinsic value of stock/yuan
25.72
12.86
6.43
Rate of change in value/%
100
-50
As can be seen from Table 3, if the rate of return increases from 15% to 20%, the growth rate will increase from 3% to 4%, and the intrinsic value of the stock will increase by 1 times. Similarly, if the rate of return is reduced from 15% to 10%, the growth rate will be reduced to 2%, and the intrinsic value of the stock will be reduced by half, that is, the growth change caused by the change of the rate of return will greatly fluctuate the value of the stock, which is risky.
4. The influence of the change of profit retention rate on the intrinsic value of stocks.
Assuming that other factors remain unchanged, the retention rate will increase from 20% to 26.67% or decrease to 65,438+03.33% (to keep the growth change the same as before), and analyze its influence on the intrinsic value of the stock. The specific results are shown in Table 4.
Table 4 Influence of changes in profit retention rate
Retention rate/%
26.67
20
13.33
Growth rate/%
four
three
three
Intrinsic value of stock/yuan
17. 15
12.86
8.57
Rate of change in value/%
33.35
-33.35
As can be seen from Table 4, the profit retention rate increased from 20% to 26.67%, the growth rate increased from 3% to 4%, and the value increased by 33.35%. On the contrary, the profit retention rate dropped to 13 33%, and the growth rate dropped from 3% to 2%, so the value also dropped by 33.35%. This shows that increasing the growth rate through more investment can also lead to the improvement of the intrinsic value of stocks, but its impact is smaller than simply increasing the rate of return. On the other hand, the company's retained profits are too small, which is not conducive to the company's development and to improving the intrinsic value of the stock.
5. The influence of the change of market discount rate on the intrinsic value of stocks.
Although the change of market discount rate does not affect the growth of the company, it affects the intrinsic value of its stock. It belongs to external factors, and its influence is mainly calculated and compared with the above internal factors. Table 5 is the analysis result of the influence of the change of market discount rate on the intrinsic value of stocks.
Table 5 Influence of changes in market discount rate
Market discount rate/%
6.5
six
5.5
Intrinsic value of stock/yuan
10.77
12.86
15.80
Rate of change in value/%
- 16.25
22.86
As can be seen from Table 5, the change of market discount rate has a great influence on the intrinsic value of stocks. If the market discount rate decreases by 0.5 percentage point, the value will increase by 22.86%, and if the market discount rate increases by 0.5 percentage point, the value will decrease by 1.625%. The market discount rate is sensitive to the intrinsic value of the stock from the perspective of the change of quantity, but because the actual change area of the market discount rate is very small, its influence on the intrinsic value of the stock is roughly the same as the above factors.
Fourth, conclusion.
To sum up, the changes of various factors related to growth have a great influence on the intrinsic value of stocks. Among them, except the market discount rate is an external factor, high growth cycle, yield and profit retention rate are all internal factors. It is difficult to accurately judge the changes of these factors, so the risk of growth stocks is great, and of course the corresponding income is also great. When investors choose growth stocks, it is very important to judge factors such as high yield, high growth period and long-term yield. The first factor can be considered from the industry, such as biopharmaceutical, information, environmental protection and other industries; The second factor can be considered from within the company, such as the quality of leaders, talent status, management level, market monopoly and particularity.