An Analysis Of Yunnan Baiyao Equity Valuation

Since 2016,in order to improve the efficiency of state-owned enterprises,enable them to establish a modem enterprise system and better participate in market competition in the future.the state has proposed the mixed-ownership reform,referred to as "mixed reform".Yunnan Baiyao.as a star enterprise of the SASAC of Yunnan,has witnessed a steady growth in annual profit for more than 20 years.The mixed reform of Yunnan Baiyao shows that the SASAC of Yunnan is determined to promote the marketization of state-owned enterprises.For the mixed reform of Yunnan Baiyao,the main problems are as follows:!.What kind of path to choose for mixed reform?2.In the future of Yunnan Baiyao,how much the share ratio of the major shareholders,and who is the controller?3.How to evaluate the equity of Yunnan Baiyao?This paper gives a brief introduction to the first two questions,focusing on the analysis of the equity value of yunnan baiyao.Firstly,this paper introduces some common valuation models in the theoretical field.including cost method,market comparison method,cash flow discount method,and real option method.Secondly,it introduces the development history and origin of Yunnan Baiyao.Once again,it will tell Yunnan Baiyao business and the development of traditional Chinese medicine market industry status in recent years;Then,according to the characteristics of traditional Chinese medicine market and the current situation of Yunnan Baiyao,the most suitable valuation method is selected in this paper:Free Cash Flow discount method for firm;Then,the selected valuation method was used to collect data and calculate the valuation of Yunnan Baiyao;Finally,the valuation model and valuation results are summarized and evaluated,and on the basis of this conclusion,investment recommendations are made.In this valuation,it firstly makes a detailed forecast for 2019-2024,and enters the sustainable forecast period after 2025.Then it uses weighted average cost of capital to discount the cash now of each period to the end of 2018.The sum of the present value of all cash flows is the current enterprise value of Baiyao.After that,the equity value of Baiyao is obtained by subtracting the debt value of the enterprise at the end of 2018 from the enterprise value.