Value Evaluation Of Biomedical Enterprises Based On EVA And Real Options

With the development of China’s economy,the improvement of residents’ living standards,and the enhancement of people’s health awareness,the biomedical industry has become one of the industries with rapid development and high attention in China in recent years.In the past three years,due to the global impact of the COVID-19,the biomedical industry has been concerned by the capital market.As an important force in the global pharmaceutical industry,China has adapted to the changes and impacts of the COVID-19 epidemic.Although the development of the biomedical industry has some cyclical fluctuations,it shows an upward trend on the whole.Through the reasonable and accurate value evaluation of biopharmaceutical enterprises,investors can be provided with more accurate information,so that they can clearly understand the true value of the enterprise,thus effectively guiding investment decisions and reducing risks.At the same time,it can also provide economic reference for the M&A,restructuring and listing of China’s biopharmaceutical industry,so as to improve the success rate of M&A and promote the development and growth of the industry.Through the analysis of domestic and foreign literatures,this paper finds that there are few cases of value evaluation of biopharmaceutical enterprises using composite models,mainly using traditional value evaluation methods.Then it analyzes the characteristics,development status and trend of biopharmaceutical enterprises,divides the biopharmaceutical enterprises into cycles according to the life cycle theory,and obtains that the traditional value evaluation method is not applicable to biopharmaceutical enterprises.It calculates the value of the case enterprise Hisco by constructing the EVA model and the physical term right model,and calculates the existing enterprise value of Hisco by using the EVA model,Calculate the potential enterprise value of Hisco through the real option model,and take the sum of the two parts of the value as the total enterprise value of Hisco.By comparing the evaluation results of the composite model with those of the market method,it is concluded that the evaluation results of the composite model are more accurate and more in line with the development characteristics of the biopharmaceutical enterprises.Through the above research,it is concluded that biopharmaceutical enterprises,as high-tech industries,are different from traditional manufacturing industries in that they have the characteristics of high risk,high return,long development cycle,etc.The use of a single model for value evaluation cannot truly reflect their value.The introduction of a combination of real option model and EVA model can quantify the benefits that may be brought by the uncertainty of biopharmaceutical enterprises’ development and flexible decision-making,making the evaluation results more comprehensive and reasonable,Provide new ideas for the value evaluation of China’s biopharmaceutical enterprises,and promote the sustainable development of the biopharmaceutical industry.