Analysis On Stock Investment Value Of Listed Pharmaceutical Companies In China

In recent years,with continuous improvement in disposable income level and accumulation in individual wealth,Chinese residents begin to attach more importance to financing.Many people decide to buy stocks in the open market in order to obtain higher returns than deposits,bonds or funds.Higher returns are accompanied by higher risks.Therefore,how to control the risk and select the stock which has investment value,has become the most concerned topic about the investors.It is also the key to obtain high returns.The pharmaceutical industry is a non-cyclical industry which is necessary for the people’s livelihood at any time.At the present stage,there will be increasing demand on this industry that makes the industry face a series of opportunities of development.Therefore,the industry with such bright development prospects is considered to be one of the most valuable industry to be invested.But for the majority of individual investors,their analysis method on investment value cannot be as senior and professional as institutional investors.Their risk bearing capacity is also relatively limited.So it is difficult for them to select the best companies for investment from the pharmaceutical industry.The purpose of this paper is to provide investors with some ideas about it.This paper uses fundamental analysis method.To be specific,it analyzes the investment value of listed pharmaceutical companies from three levels:macro environment level,industry level and micro company level.The macro analysis uses PEST analysis model,depending on the statistical data which are mainly released by National Bureau of Statistics,National Ministry of Industry and Information and some other authorities,to analyze the macro political,economic,social and technological environment in which the pharmaceutical companies are situated.On the industry level,this paper objectively analyzes the favorable and unfavorable factors that may influence the development of the pharmaceutical industry.The investment value of this industry becomes clear after a comprehensive evaluation of its good development prospects.On the micro level,this paper uses the method of empirical analysis,to establish a comprehensive evaluation system of investment value on the basis of public financial data.After the principal components analysis,it respectively scores and ranks the investment value of the listed pharmaceutical companies which manufacture traditional Chinese medicine and western medicine.The rankings will be compared with the rankings of stocks’ market-to-book ratios which represent their market performances.In the light of the comparison,the stocks which are worth investing will be listed for reference.In addition,this paper analyzes the specific stocks whose market performances diverge severely from their internal values.Besides business performance,the market is also sensitive to some other signals,such as major shareholders’ increasing or reducing holdings,M&A plans and negative news.Such factors can often stimulate or inhibit the rise of stock price,or even have a decisive impact on it.