Research On The Value Of Hengrui Medicine From The Perspective Of Valuation

The pharmaceutical industry is an important part of the economy,because China’s aging trend is rising,and the country is now paying more attention to the pharmaceutical industry.Medicine is different in that it is highly relevant to human health.There is an almost permanent market for pharmaceuticals,which are of high economic value.Jiangsu Hengrui Pharmaceutical co.,Ltd.is a large listed company integrating research,development,production and sales.It is a benchmark for innovative pharmaceutical industry and one of the most representative enterprises in the pharmaceutical industry,with typical characteristics of pharmaceutical enterprises.Capital markets have been giving hengrui pharmaceutical higher evaluation,then what is the true intrinsic value hengrui pharmaceutical,this article choose the suitable valuation method to the valuation of hengrui pharmaceutical,in the process of valuation to find key factors of the impact of hengrui pharmaceutical value,and aims at the key factors influencing the hengrui pharmaceutical value put forward Suggestions for the improvement of hengrui value.Through the comparison of various company value assessment methods,this paper believes that FCFF model(Free Cash Flow for the Firm)is more applicable to the value assessment of the pharmaceutical industry.Then it studies the operating status of Hengrui Pharmaceutical,introduces the general situation and financial situation of Hengrui Pharmaceutical,analyzes the financial statements from 2015 to 2019,and forecasts hengrui’s future operating income,after-tax net profit,capital expenditure and other free cash flow.Use FCFF model to the valuation of hengrui pharmaceutical,got the hengrui’s intrinsic value,hengrui pharmaceutical for dupont analysis and valuation in the process of finding out the key factors affecting hengrui pharmaceutical value,the key factors influencing the hengrui value lies in cash utilization,developing innovative products,and working capital investment policies,and finally analyses several key factors are reasonable and puts forward some Suggestions of improve enterprise value,optimize investment policy,improve liquidity management,improve the independent innovation,strengthening the research and development management,etc.Reasonable estimation and analysis of the intrinsic value of Hengrui Pharmaceutical Company will help managers of Hengrui Pharmaceutical company to have a more comprehensive understanding of the company’s value status and its influencing factors,and managers can also make strategic decisions based on the research conclusions to improve the core competitiveness of the enterprise.This research also has some reference to the value management of similar enterprises.It also provides the service foundation for the development of China’s pharmaceutical industry.