Valuation of the IoT Industry Based on Relative and Absolute Valuation Method

Research Article
Open access

Valuation of the IoT Industry Based on Relative and Absolute Valuation Method

Zirou Li 1* , Kaijie Tan 2 , Xi Yang 3
  • 1 Hong Kong Shue Yan University    
  • 2 Jiangxi University of Finance and Economics    
  • 3 Beihang University    
  • *corresponding author 209015@hksyu.edu.hk
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/35/20231750
AEMPS Vol.35
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-091-2
ISBN (Online): 978-1-83558-092-9

Abstract

In recent years, the IoT industry has experienced an extremely rapid development which attracts large amounts of investors. In this case, a suitable valuation for such industry is necessary to offer some suggestions for investments. Applying the relative valuation method and the absolute valuation method to analyze the valuation of the Internet of Things industry, this article studies the data development of five leading companies in the industry and performs the discounted cash flow valuation method on Hikvision, with the aim of providing regulatory advice to listed companies and providing investors with a basis for decision making. The results show that the overall development trend of the industry is found to be good at present, and the cash flow is in the state of increasing year by year but diminishing margin, but there may be a downward trend and the industry still has some room for growth in the future. These results shed light on guiding further exploration of IoT industry evaluation.

Keywords:

Internet of Things, industry valuations, relative valuation method, absolute valuation method, DCF model

Li,Z.;Tan,K.;Yang,X. (2023). Valuation of the IoT Industry Based on Relative and Absolute Valuation Method. Advances in Economics, Management and Political Sciences,35,222-230.
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References

[1]. Chen, S., Xu, H., Liu, D., et al.: A Vision of IoT: Applications, Challenges, and Opportunities With China Perspective. IEEE Internet of Things Journal, 1(4), 349-359 (2014).

[2]. Choi, W., Kim, J., Lee, S., et al.: Smart home and internet of things: A bibliometric study. Journal of Cleaner Production, 301, 126908 (2021).

[3]. Ndiaye, M., Oyewobi, S., Abu-Mahfouz, M., et al.: IoT in the Wake of COVID-19: A Survey on Contributions, Challenges and Evolution. IEEE Access, 8, 186821-186839 (2020).

[4]. Bai, L., Yang, D., Wang, X., et al.: Chinese experts’ consensus on the Internet of Things-aided diagnosis and treatment of coronavirus disease 2019 (COVID-19). Clinical eHealth, 3, 7-15 (2020).

[5]. Charsios, G., K. Moutafidis, G. Foroglou.: Valuation model for Internet-of-Things (IoT) startups. in Conference Paper (2016).

[6]. Yiqing, S.: Analysis of the Investment Value of Gaoxinxing High-tech IoT Company, in Economics ＆ Management. Guangdong University of Finance & Economics (2020).

[7]. Kun, J.: A Study on the Value Evaluation of Listed Companies in the Internet of Things ——A Case Study of H＆T, in Economics ＆ Management. Donghua University (2022).

[8]. Zhao, Z.: Enterprise valuation analysis based on FCFF, time series method. Finance Economy, 20, 48-51 (2019).

[9]. Yuqing, S.: Valuation of Iot Biotechnology Enterprises ——Take Haier Bio for Example, in Economics ＆ Management. Qingdao University of Technology (2022).

[10]. Jiangping, T.: Company Value Exploration Based on the Vew of Cash Flow ——Take Guizhou Maotai and Hikvison as Examples, in Economics ＆ Management. Yunnan University of Finance and Economics (2020).

[11]. Dan, H.: Analysis of Stock Valuation Methods. China Journal of Commerce, 21, 89-90 (2016).

[12]. Chenyang, L.: Research on Stock Selection Based on K-means Clustering and Relative Valuation. Journal of Changchun Finance College, 01, 34-42 (2021).

[13]. Daxun, M.: Research on the application of the modified relative valuation method in the A-share market, in Economics ＆ Management. Guizhou University (2016).

[14]. Chenyu, X.: Stock Value Analysis based on DDM model and relative valuation method -- A case study of Minsheng Bank (600016). Modern Business 12, 91-92 (2020).

[15]. Lu, S.: Method DCF-Application of DCF model in the valuation of Changjiang Electric Power Company. Co-Operative Economy & Science, 06, 115-117 (2022).

[16]. Wu, J., Xiao, J.: Development path based on the equalization of public services under the management mode of the Internet of Things. Socio-Economic Planning Sciences, 80, 101027 (2022).

[17]. Lu, Y., Xu L.: Internet of Things (IoT) Cybersecurity Research: A Review of Current Research Topics. IEEE Internet of Things Journal, 1, 1 (2018).

[18]. Fernandez, P.: A General Formula for the WACC: a Comment. International Journal of Business, 12, 3 (2007).

[19]. Fernandez, P.: WACC: definition, misconceptions, and errors. Business Valuation Review, 29(4), 138-144 (2010).

[20]. Yin, R.: Research on the Valuation of Listed Companies in the TMT Industry——Based on Hikvision. Harbin University of Commerce (2020).

[21]. Da, Z., Guo, R. J., Jagannathan. R.: CAPM for estimating the cost of equity capital: Interpreting the empirical evidence. Journal of Financial Economics, 103(1), 204-220 (2012).

Cite this article

Li,Z.;Tan,K.;Yang,X. (2023). Valuation of the IoT Industry Based on Relative and Absolute Valuation Method. Advances in Economics, Management and Political Sciences,35,222-230.

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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About volume

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

ISBN：978-1-83558-091-2(Print) / 978-1-83558-092-9(Online)
Editor：Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.35
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Chen, S., Xu, H., Liu, D., et al.: A Vision of IoT: Applications, Challenges, and Opportunities With China Perspective. IEEE Internet of Things Journal, 1(4), 349-359 (2014).

[2]. Choi, W., Kim, J., Lee, S., et al.: Smart home and internet of things: A bibliometric study. Journal of Cleaner Production, 301, 126908 (2021).

[3]. Ndiaye, M., Oyewobi, S., Abu-Mahfouz, M., et al.: IoT in the Wake of COVID-19: A Survey on Contributions, Challenges and Evolution. IEEE Access, 8, 186821-186839 (2020).

[4]. Bai, L., Yang, D., Wang, X., et al.: Chinese experts’ consensus on the Internet of Things-aided diagnosis and treatment of coronavirus disease 2019 (COVID-19). Clinical eHealth, 3, 7-15 (2020).

[5]. Charsios, G., K. Moutafidis, G. Foroglou.: Valuation model for Internet-of-Things (IoT) startups. in Conference Paper (2016).

[6]. Yiqing, S.: Analysis of the Investment Value of Gaoxinxing High-tech IoT Company, in Economics ＆ Management. Guangdong University of Finance & Economics (2020).

[7]. Kun, J.: A Study on the Value Evaluation of Listed Companies in the Internet of Things ——A Case Study of H＆T, in Economics ＆ Management. Donghua University (2022).

[8]. Zhao, Z.: Enterprise valuation analysis based on FCFF, time series method. Finance Economy, 20, 48-51 (2019).

[9]. Yuqing, S.: Valuation of Iot Biotechnology Enterprises ——Take Haier Bio for Example, in Economics ＆ Management. Qingdao University of Technology (2022).

[10]. Jiangping, T.: Company Value Exploration Based on the Vew of Cash Flow ——Take Guizhou Maotai and Hikvison as Examples, in Economics ＆ Management. Yunnan University of Finance and Economics (2020).

[11]. Dan, H.: Analysis of Stock Valuation Methods. China Journal of Commerce, 21, 89-90 (2016).

[12]. Chenyang, L.: Research on Stock Selection Based on K-means Clustering and Relative Valuation. Journal of Changchun Finance College, 01, 34-42 (2021).

[13]. Daxun, M.: Research on the application of the modified relative valuation method in the A-share market, in Economics ＆ Management. Guizhou University (2016).

[14]. Chenyu, X.: Stock Value Analysis based on DDM model and relative valuation method -- A case study of Minsheng Bank (600016). Modern Business 12, 91-92 (2020).

[15]. Lu, S.: Method DCF-Application of DCF model in the valuation of Changjiang Electric Power Company. Co-Operative Economy & Science, 06, 115-117 (2022).

[16]. Wu, J., Xiao, J.: Development path based on the equalization of public services under the management mode of the Internet of Things. Socio-Economic Planning Sciences, 80, 101027 (2022).

[17]. Lu, Y., Xu L.: Internet of Things (IoT) Cybersecurity Research: A Review of Current Research Topics. IEEE Internet of Things Journal, 1, 1 (2018).

[18]. Fernandez, P.: A General Formula for the WACC: a Comment. International Journal of Business, 12, 3 (2007).

[19]. Fernandez, P.: WACC: definition, misconceptions, and errors. Business Valuation Review, 29(4), 138-144 (2010).

[20]. Yin, R.: Research on the Valuation of Listed Companies in the TMT Industry——Based on Hikvision. Harbin University of Commerce (2020).

[21]. Da, Z., Guo, R. J., Jagannathan. R.: CAPM for estimating the cost of equity capital: Interpreting the empirical evidence. Journal of Financial Economics, 103(1), 204-220 (2012).

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