The Investment Value Analysis Of Pharmaceutical Industry Listed Companies In China—Based On Factor Analysis Method

With the develping of our country's economy and the increasing of people's income, financing problem become a focus in people's lives gradually. The stock has become the first selection for many middle and small investors to invest. However, ordinary investors have no professional theoretical knowledge and practical experience, and it is difficult for them to search the real information and history, so the investors are often at a loss when making investment decisions.The goal of investment is to double their money and reduce risks.The value of a company can be used as the proofs for investment decisions.The question of how to chose the better stock when avoid risks and loss becoming more urgent by the month.The pharmaceutical industry have relation to social stability,national security and the people's livelihood,so our government have given support to the sector and at present it has risen to a strategic level.Along with the growing of China's economy,the improving of people's living standards and the social security system, as well as the reforming of the implementation of the medical system,our pharmaceutical industry adjust the structure and expand production scale and market sales volume.So the sector has attract more and more investors because of scale economic benefit.Therefore,this article put the pharmaceutical industry as the object of study. But now the experts study the value of the investment for the pharmaceutical industry a little, and mostly for qualitative analysis, and those findings are not convincing.Therefore, the investment value analysis of pharmaceutical industry of listed companies in China –based on factor analysis method has important practical significance.It is not yet mature to analysis of investment value of companies in our country, previous studies focused on either qualitative analysis or quantitative analysis, however I am used in both qualitative and quantitative basis of previous combination method study. On qualitatively aspect, I firstly reviewed the theory of investment value, and then combined with the impact of pharmaceutical industry investment value of the macro and middle factors on the investment value of China's pharmaceutical industry. The results show that under the national policy support, the pharmaceutical industry demand continues to rise and has a good growth and profitability and it also can provide investors with a better investment opportunities. In the quantitative aspect, previous studies mainly use the data of the investment value of the company is a quarter or one year. Taking into account the relative stability of the investment value analysis, the paper selected annual report data during 2012-2014 of China's pharmaceutical industry listed companies and it is more convincing. I selected annual financial data during the 109 listed companies including the ability to resist risks, operational capacity, profitability, growth capacity and governance capacity. Then I build the investment value index evaluation system of the company and the index is more one than before and apply the factor analysis of multivariate statistical analysis to makes an empirical analysis and calculate their comprehensive scores and analysis of those companies investment value, and use the p/e ratio to validate. so we can get the overvalued or undervalued listed companies and the main factors that influence the investment value of listed companies, this can indicate the development direction of listed companies, and finally we can select Double Heron Pharmaceutical Industry, HengRui Medicine which ranked relatively stable, and Sea Pury's ranking rise gradually, so they are worthy to be concerned about and provide a reference for small and medium-sized investors when they make investment decisions, and help small and medium-sized investors to make the right judgment.