A Research On The Financial Performance And Stock Valuation Of Yunnan Baiyao And Huarun Sanjiu

Chinese traditional medicine is a treasure of 5,000 years,and a crystallization of thousands of years of medical practice.This paper chooses Yunnan Baiyao and Huarun Sanjiu,two listed companies whose strength and rank are both in the proprietary Chinese traditional medicine industry,as the research objects.Through analysis of the financial performance of the two companies from 2012 to 2016,we can compare their financial policies and development strategies.Then we make a stock-price research of the two companies in the next 5 years by using free cash flow model and price-earnings ratio model.We hope to put forward some useful suggestions for their future development by comparing their own operating and financial conditions,and also provide objective and scientific evidences for investors'investment decisions.This paper is divided into six chapters.The first chapter expounds the research background,puts forward the main problems and significance of the research,determines the research methods,research ideas and frameworks,and systematically reviews and summarizes the following documents.The second chapter gives an in-depth analysis of the current situation and development trend of proprietary Chinese medicine industry and analyzes the main problems in the development of the industry.The third chapter introduces the development history and present situation and business model of the two companies and forecasts the company's future market prospects.The fourth chapter carries on the financial analysis to the historical operation data of the two companies and forecasts the main financial data to get a comprehensive understanding of Yunnan Baiyao and Huarun Sanjiu.In the fifth chapter,we use the free cash flow discount model and the price-to-earnings ratio model to estimate the stock-price of two companies and get a reasonable price range.The sixth part summarizes the above analysis concluded and gives the appropriate investment strategy and recommendations.After analysis,we concluded that the business and financial status of Yunnan Baiyao and Huarun Sanjiu are both good in recent years.Both of them are "a value-added enterprise",the growth and performance of both companies is stable and can be expected.The current stock-price of the two companies is still undervalued,it is recommended to buy into and hold.The following investment proposals are put forward:(1)Make a "top-down" investment strategy,that is,starting from the macroeconomic environment,selecting industries with great potential for development.(2)Select high-quality stocks from the good-performance industries.