Corporation Value Evaluation Of Sunyuan Shares Based On Free Cash Flow Discount Model

Benefit from the rapid development of our economy and the improvement of people’sliving standards, the development of China’s dairy industry is booming. Especially since thereform and opening up, China’s dairy production increased rapidly by double-digit annualgrowth, which has gradually attracted the eyes of the world. However, behind the rapiddevelopment, how to correctly evaluate the true value of milk companies for investors andmanagers, which needs to have a reasonable evaluation.Therefore, this article selects the Sanyuan shares as a representative of the milkcompanies’s value evaluation to study. First of all, contrasting commonly used three kinds ofevaluation methods of value evaluation, chose the better practicability and rationality of freecash flow discount method for evaluating tool; Secondly, around the development status ofSanyuan shares in recent years, analyzed its macro environment and microcosmicenvironment, in order to accurately assess the value, and through the analysis of the specificdata and predicting, use free cash flow discount model obtain the value of the Sanyuan shares;Then, contrast the result of the valuation and the current market value, and validate the resultby applying the method of price-to-book to come to the conclusion that Sanyuan shares wasunderestimated, so proving the rationality of free cash flow discount method; Finaly, have aresearch of driving factors for Sanyuan shares value enhancement and put forward relatedsuggestions.This article obtained evaluation results based on free cash flow discounting model,verified the legitimacy and validity of it from multifaceting analysis the reason thatSanyuan shares was undervalued, and analyzed the ways to enhance the future value ofSanyuan shares from four side which incloud management system, product structure,marketing channels and brand image. From all of works, there will have some practicalsignificance in theoretical and practical aspects.