An Investment Value Analysis Of Xiamen Tungsten CO. Ltd

After 11 years of development,Xiamen Tungsten CO.Ltd has become the leading enterprise in China Tungsten Industry Chain of non-ferrous metals industry, and has an excellent level of performance.By the world financial crisis,whether Xiamen Tungsten is still able to maintain a good level of growth,or whether it has the investment value,that is the focus of investors.In this paper,we use the top-down approach of the investment valuation,in order from the macro-economic analysis,the industry analysis,and the company analysis. Finally,we give a reasonable valuation on Xiamen Tungsten through the DCF method of FCFF and the P/E method.In order to provide references for investors,we also give the tips of the investment risk and the investment advice.The impact,which is caused by the world economic crisis,is difficult to be improved in the short term,and the economy of China will be going through an adjustment and recovery in recent years.Although China has introduced some policy to stimulate the economy,there is still a negative impact on the domestic tungsten industry,which is the export-oriented.The profit level of the overall tungsten industry will be decreased significantly.The concentration of the domestic tungsten industry is not high,and products are mostly low value-added primary ones.In future,the competition of the domestic tungsten industry will become increasingly fierce.All major competitors of the domestic tungsten industry will exert their respective competitive advantages,which will promote the industrial upgrade of the domestic tungsten industry,and accelerate the pace of the industry consolidation.Through the analysis of the company's operations,we believe that the overall operation of Xiamen Tungsten is in good condition.The company will develop the business of the deep processing in the tungsten industry,and the new materials business will become a new growth point.Through the analysis,we believe that the company will remain at 6%growth of the operation revenue from 2009 to 2011,and at 20%growth of the operation revenue from 2012 to 2021,and 1%of sustainable growth of FCFF value after 2022.Finally,through the DCF method of FCFF and the P/E method we get a reasonable price range of the Xiamen Tungsten stock in 2009.It is from 11.66 RMB to 12.60 RMB per stock.At the same time,we also give the tips of the risk in investing in Xiamen Tungsten,as well as investment advices.The current share price of Xiamen Tungsten,compared with the reasonable price range,is slightly high.So we suggest that investors should be careful,and we do not recommend investors to buy it in the current.