Research of Company Valuation in China's Private Equity Investment

At current stage, Private Equity Operators (PEOs) do not have widely recognized formula for company valuation in Private Equity (PE) investment in China. Valuation becomes the most important issue and even barrier for the sector development. In this paper, theoretical valuation model and its limitations will firstly be discussed. After that, two main practically used methodologies will be explained in details. Finally, a regression model will be introduced to obtain rational valuation and it helps to reduce investment risk in practical event. Also, its scientific contribution in PE investment will be concluding at the end.