Research On The Valuation Of China Resources Medical Acquisition Phoenix Medical

Mergers and acquisitions have become an important method for enterprises to improve business management,adjust strategic structure,This year,the rapid development of China’s M&A market is mainly due to the fact that China’s market economy reform has enabled more companies to invest in mergers and acquisitions for their own rapid growth.Capital has become the driven force in industry development,and medical care is no exception.M&A is one of the most important and effective ways for enterprises to expand capital and realize market resource allocation.As a sunrise industry,since the reform and opening up,pharmaceutical companies have developed rapidly in the national economy.China’s medical enterprises have the characteristics of advanced technology,high investment,and relative monopoly.The problem of low concentration and industrial policy orientation has accelerated the merger and acquisition of Chinese medical enterprises.It further accelerates the development of the pharmaceutical industry and provides fresh impetus to social capital with the deepening of medical reform.Driven by the medical reform policy,the social capital of public hospitals will face comprehensive reforms,medical services will be differentiated,and the pharmaceutical industry integration strategy will receive a large number of investment opportunities.Previously,most medical M&A researches focus on the “medicine” industry but less on the “medical” industry.Starting from the background of medical reform,this paper combines the valuation characteristics of the historical-cost-based valuation of medical industry,less comparable enterprises and policy-decided future income.First,it sorts out the mainstream methods in enterprise assessment.The preconditions,scope of application,advantages and disadvantages of various mainstream methods are summarized.Then it introduces in detail the macro background,industry competition,enterprise status and M&A motives of pharmaceutical companies.The two-stage model of discounted cash flow method is analyzed and is the best method for pharmaceutical enterprise evaluation.Then,taking China Resources Medical’s acquisition of Phoenix Medical as an example,and based on the five years’ financial data of Phoenix Medical,this paper conducts a comparative analysis of Phoenix Medical’s operating capacity,solvency and profitability.This paper adjusts the valuation model and carries out reasonable analysis and forecast for cash flow and discount rate in the two-stage model of the discounted cash flow method respectively.It also makes a reasonable forecast of the physical cash flow and discount rate for the next five years.Then,by using the discount rate predicted via the weighted capital cost,and applying the capital asset pricing model,the evaluation value of the Medical M&A of China Resources is obtained.This paper analyzes the domestic medical industry,precisely the motivation of public medical value creation after medical reform.In this research,the valuation and follow-up development study of medical M&A can offer a useful reference for the medical enterprises in China.