| The development of the seed industry is not only related to food security,but will also affect the implementation of major national strategies such as scientific and technological self-reliance and modernisation of agriculture and rural areas.Cultivating and operating listed companies in the seed industry will help improve China’s agricultural industrial structure,promote the industrialisation of China’s agriculture,enhance the quality of China’s agricultural products,improve the international competitiveness of China’s agriculture and accelerate the modernisation of China’s agriculture.However,when valuing seed companies,the traditional valuation methods have certain shortcomings,resulting in deviations in the valuation of seed companies and affecting mergers and acquisitions and restructuring among seed companies.Therefore,based on the characteristics and current situation of listed seed companies,it is of great practical and theoretical significance to explore a more scientific and systematic method of enterprise value valuation.This paper firstly introduces the concept of enterprise value and its valuation methods and other relevant theoretical studies,and analyses the applicability and limitations of various valuation methods.Secondly,it elaborates on the political and economic background environment and development status of the seed industry,and conducts a SWOT analysis and financial situation analysis of Yuan Longping High-Tech Agriculture Co.,Ltd,and discusses the characteristics,valuation features and valuation problems of Yuan Longping High-Tech Agriculture Co.,Ltd.Through the above theoretical foundation and analysis of the characteristics of Yuan Longping High-Tech Agriculture Co.,Ltd,this paper proposes a new valuation method for assessing the enterprise value of Yuan Longping High-Tech Agriculture Co.,Ltd-a combination of the enterprise free cash flow method and the real options method.In this paper,the enterprise free cash flow method is applied to calculate the value of Yuan Longping High-Tech Agriculture Co.,Ltd’s physical assets and the real options method to calculate the potential option value of Yuan Longping High-Tech Agriculture Co.,Ltd,and then sum up to obtain the overall value of Yuan Longping High-Tech Agriculture Co.,Ltd.The overall value of Yuan Longping High-Tech Agriculture Co.,Ltd calculated using the corporate free cash flow method alone and the real options method introduced on top of this method were also compared and analysed and the results validated respectively.The results of the study are as follows.The entity value of Yuan Longping High-Tech Agriculture Co.,Ltd calculated using the enterprise free cash flow model as at 31 December 2021 was RMB27,322million(RMB20.75 per share),while the 30-day average closing price to the valuation benchmark date(31 December 2021)was RMB23.70 per share,representing a difference of-12.43% between the entity value and the market value.Through the research in this paper,it is found that Yuan Longping High-Tech Agriculture Co.,Ltd’s investment in research and development of core technologies is increasing and its core businesses have good development potential to create potential earnings for the enterprise,so we can regard Yuan Longping High-Tech Agriculture Co.,Ltd’s three core businesses as a call option and the value of the core businesses is the value of this call option.In this paper,the B-S option pricing model in the real options method is used to calculate the value of this part of the option,resulting in an option value of RMB6,891 million.The sum of the entity value calculated by the Enterprise Free Cash Flow Method and the option value calculated by the Real Options Method yields an overall value of Yuan Longping High-Tech Agriculture Co.,Ltd of RMB34.213billion(RMB25.98/share),with an error margin of 9.66% compared to the market value.The analysis and comparison showed that the traditional free cash flow method alone had underestimated the corporate value of Yuan Longping High-Tech Agriculture Co.,Ltd,while the combination of the real options method could reflect the overall value of Yuan Longping High-Tech Agriculture Co.,Ltd,which was closer to the actual value of the enterprise,and proved the applicability of the free cash flow method combined with the real options method for the enterprise value assessment of the seed industry enterprise Yuan Longping High-Tech Agriculture Co.,Ltd.Therefore,the valuation result of RMB34,213 million(RMB25.98 per share)calculated under the combination of the real options method was finally selected as the reference value for the enterprise value assessment of Yuan Longping High-Tech Agriculture Co.,Ltd.The study concludes that the introduction of the real options method in combination with the enterprise free cash flow method is a more reasonable way to reflect the true value of the seed industry enterprise Lupin Hi-Tech than the traditional enterprise value assessment method alone.This is a new way of thinking about the application of the real options approach to enterprise value assessment in the seed industry,and has implications for the valuation of other seed industry enterprises. |
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