The EVA Impact the Share Price in China Market

Nowadays, our stock market is connecting the international market, and the investment strategy of the QFII is becoming the mainstream in our market, at the same time our traditional investment method is confusing us for the share price is diploid than one year ago while the outstanding achievements of listed companies keep unchanged. Well then, which appraisal way should we adopt and which companies should we select to invest in our future investment and analysis?This paper tried to find a new way and integrated the actual conditions of our market from the EVA（Economic Value Added）. In short, EVA is an economic profit including capital stock cost and could reflect the real-life fortune that has been made by operator. Because the EVA is a gross, we get EVA per share （EVA/gross capital stock）. This paper collected and processed the datum of EVA per share、 EPS、 ROE、 ROA of 40 listed companies from 2000 to 2002, we found the EVA per share and EPS relate to the share price the most by analysis between each index and share price, so we modeling EVA per share、 EPS and share price, the model is Y = e^3.251 * X₁^0.1322* X₂^0.5726 ,Y is share price, X₁ is EVA per share,X₂ is EPS, and this model fit to the fact of our market very well by qualitative analysis, thus the model could be adopted to operation.Although there are some disadvantageous factor for the model application, such as the supervise and the information proclamation system are not very good、 there are many problems in firm management、 the inefficient and juvenility of our market, and so on. But we can still see the model is efficiency in appraisal the share price. Base of this research, we can deduce that introduce the EVA to our investment analysis system will be helpful for the criterion of listed companies and speeding our market development.