Opportunities and Valuation Strategies in Private Equity Investments in the New Energy Sector

School of Economics, Qingdao University, Haison Yiyun Town, Rhine Residential Quarter, China

^* Corresponding author: zhangqiyuezhangqiyue@outlook.com

Abstract

Underpinned by China’s dual-carbon strategy, the new energy sector is witnessing rapid growing and is increasingly drawing the attention of private equity investors. However, traditional valuation methods frequently fall short in precisely gauging the intrinsic value of firms in this sector that are characterized by high R&D intensity and high uncertainty. To address this gap, this paper constructs an innovation-oriented valuation strategy framework, which integrates several pivotal variables, including R&D intensity, the robustness of the patent portfolio, and the progress of commercialization. Through eempirical tests using case studies of NIO Autonomous Driving and Weichai Hydrogen Energy, the model’s enhanced explanatory power in discerning technological potential and growth prospects is effectively demonstrated. Concurrently, the study highlights the limitations related to variable weighting, data availability, and the model’s generalizability, thereby pointing out potential avenues for future refinement. By delving into valuation mechanisms from an innovation perspective, this research aims to provide theoretical insights and practical tools to guide private equity investment practices in the new energy sector.