Research on stock valuation of listed companies and influencing factors of stock price profitability

Abstract

Since the reform and opening up, China's capital market has made a rapid progress. At present, due to the lack of sound basic capital market system, stock prices fluctuate greatly. The stock price is determined by two main factors, that is, the company's profits and investors' valuation of the company. Among them, profit is generally affected by the analysis of the company's financial statements, and is determined by the company's operating conditions. If investors want to further determine the company's stock price, they need to solve a problem, which is how to reasonably and accurately value these listed companies. After analysing the situation and data in China, this paper gets some main factors affecting the company valuation. This paper introduces several stock valuation methods which are widely used in the industry, namely relative valuation methods and absolute valuation methods, and applies them with foreign ownership as an example analysis.