Valuation Research Of Vital BioTech Holdings Ltd.

As the Chinese security market is unceasing warmed up from the second half of the year of 2006,stock price is rising very rapid,at the same time the share price of every profession is also changing greatly,so it isn't suitable again to estimate value for the all kind of companies by the traditional,unitary method.With the requirement of the market economy,it is a very important and regular work for the investor and the business management to do a reasonable,effective valuation by selecting right method for each kind of enterprise,and to guide the stock price to represent its intrinsic value.On the other hand,the performance of medicine board is always general in domestic and Hong Kong's security market,when the situation is very good to the other boards.Especially growing high-tech enterprises such as biological medicine companies are not satisfying very much.Therefore it is necessary to estimate value again for medicine profession.Above states just is the significance of this essay to research the value of Vital BioTech Holdings Limited(the Vital group).The frame of the research of this essay is to estimate and obtain the intrinsic value of the Vital group by selecting the combination way of the DCF method and the PEG method after researching and comparing the valuation method.This essay determines the value of group mainly by quantitative analysis method and carries out the qualitative analysis and judgement to the key factors that affect enterprise value by qualitative analysis method.The stage of quantitative analysis,We emphasize on discussing the establishment of DCF model and the determination of some essential parameters,so that guarantee the objectivity and the accuracy of assessment model,and we estimate the growth of group by PEG method.The stage of qualitative analysis,we carry out mainly in the external environmental and internal condition of the Vital group operation , so that make a judgement for operation condition and prospects for development of group through the means such as profession analysis,product,business structural analysis and financial analysis,as well as the commercial strategy of group.This essay comes to the conclusion:the reasonable value of the Vital group should be HK$1.5,so there is 305.4% space to rise yet by comparing with HK$ 0.37, the current price on October 12,2007. We think that the value of the Vital group is undervalued obviously.