| Along with the smooth progress of non-tradable shares reform, the Chinese stock market will head for maturity gradually. Facing an increasingly mature market, It seems to be especially important that the investors carry on the valuation of the listed company scientifically and reasonably . The mature capital market should be provided with a good resource allotment function. Thus, Investors need to consider how to choose a company with a better potential of development in the experienced industry. So, This thesis chose two greatest business enterprises in Chinese milk products industry, Inner Mongolia Yili Industil Group co.,Ltd (YIG)and China Mengniu Dairy Company,(CMDC) as the target companies to contrast . This thesis hope the analytical case study of valuation can resolve the problem.This thesis estimated the two companies'inner value and the competition ability from both macroscopic and microcosmic aspect.Firstly, This thesis explained the development background, present situation and trend of the Chinese dairy product industry and pointed out the opportunity and risk of the two companies.Secondly, This thesis contrasted the financial instance,inner value and the market value of the two companies by EVA,FCFF models.At the end, This thesis consider the China Mengniu Dairy Company a better investment potential by EVA,Value of Equity.This thesis think in addition to the controlling ability of resources, brand, the product quantity, the Return On Invested Capital (ROIC)and Weighted Aver Age Cost of Capital(WACC) are also the important factors that influence the company value. Because the risk premium of capital market in Hong Kong is consumedly lower than the Chinese hinterland, the WACC of CMDC is consumedly smaller than that of YIG. Only by raising its ROIC and reducing its WACC can YIG promote the value of the company continuously. From a certain aspect, more valid Chinese capital market may reduce the YIG's WACC and raise its competitive ability. |
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