An Analysis On Investment Value Of Three Zinc Industry Public Companies

In the past few years, nonferrous metals price has climbs up rapidly because of resource shortage around the globe. The nonferrous metals mining enterprises are firstly benefited. Besides, after years of bear market, the Chinese security market starts to boom from 2006. Stocks of publicly owned nonferrous metals companies became the targets of many investors, the prices increased a lot. Under this background, the author try to use the financial knowledge learned in the past two years'MBA study, analyze the value of selected typical companies in the nonferrous metals industry and provide recommendations for investors.This abstract selects three publicly owned zinc manufacturing companies in the nonferrous metals industry, analyses from different perspectives such as macro-economy, industrial situation, the operation of target companies and their financial situation; uses methods like cash flow discount model, dividend discount model and price earning ratio model for valuation.There are five chapters in this abstract.First chapter is comprehensive description of this study, including the background of the study, the main issues and meanings, and the framework.Second chapter is the analysis of nonferrous metals industry and the macro-economy analysis. This includes the analysis of current macro-economy situation and characteristics, the relations between the nonferrous metals industry and macro-economy, and current developing status and foresight of nonferrous metals industry.Third chapter is the analysis of companies. This includes operational and financial analysis of the three companies. The analysis is based on the fiscal reports of them from 2004 to 2006, analyses their liquidity, operation efficiency, debt paying ability, profitability and growing potential and provide reference for investment decision making.Forth chapter is valuation analysis. There are three models adopted to valuate and compare the three companies: cash flow discount model, dividend discount model, and price earning ratio model.Fifth chapter is the conclusion and investment suggestions. From the study, I conclude that Zinc Industry is not worth investing, Zhongjinlingnan Nonfemet is priced reasonably, Chihong Zinc & Germanium is worth investing. Therefore, I suggest investors to reduce their shares of Zinc Industry, increase shares of Zhongjinlingnan Nonfemet with caution, and increase shares of Chihong Zinc& Germanium.