Research On Valuation Of Weilong Based On Scenario Analysis

With Weilong’s application to list on the Hong Kong Stock Exchange,the popular leisure food "spicy strips" was once again pushed to the headlines of major media.As a company that many people remember from childhood,Weilong has changed from a small workshop to a company to be listed in the development process of more than 20 years,but what is more striking is that the company whose main product is "spicy strips" with a unit price of 50 cents has been reported by the market with a valuation of over 60 billion.How can it support such a high valuation,and where is Weilong’s moat? At the time of its listing in Hong Kong,whether Weilong is really worth the money,this is not only a confusion of ordinary people,but also a question of enterprise managers and many potential investors.At the same time,in the era of "new retail" and "Internet +",with the improvement of people’s quality of life and changes of lifestyle,the traditional leisure food industry is also undergoing earth-shaking changes.More and more risks are worthy of corporate attention.Under such a background,how to revise the traditional valuation model to improve the accuracy of the valuation is a question worthy of discussion.This paper selects Weilong,which is to be listed,as the research object,hoping to explore the valuation characteristics of this industry through case studies,and summarize other general valuation models that can be applied to the industry to improve the precision of valuation.Specifically,this paper introduces the scenario analysis method in the valuation process,and resolves the single defect of the traditional valuation model scenario through the establishment of multiple scenarios,thereby improving the accuracy of the valuation.It is worth mentioning that this paper is not a simple application of the scenario analysis method,but proposes an "industry-enterprise joint scenario model",which can be used to set up scenarios more logically through two-dimensional approaches.At the same time,since Weilong is still in the expansion stage and the capital structure is not stable,this paper chooses the APV method to replace the traditional cost of capital method to value.On the one hand,it avoids the strict premise of the cost of capital method,and on the other hand,it also expands new ideas for the application of the scenario analysis method.From the research results of this thesis,the leisure food industry has undergone many changes in the context of the new era,and the development of enterprises in the industry has high uncertainty.Applying scenario analysis in such a scenario,replacing a single scenario with multiple scenarios for valuation analysis is an effective way to improve accuracy.At the same time,the capital cost method has high requirements on the accuracy of capital structure determination,and the adoption of the adjusted present value method can better avoid the problem of unstable capital structure of enterprises,and provide a channel for the valuation of this type of enterprises.Judging from the valuation results,among the four scenarios established in this article,Weilong has only reached the market valuation level in the scenario with optimistic corporate prospects.From the scenario-weighted result,the market valuation is on the high side.Therefore,for investors,they should rationally judge the investment value of Weilong,make prudent investments,and do not follow the crowd to make investment decisions blindly;for managers,they should resolve the potential risks of the enterprise in time,maintain their own advantages,thereby increasing its own value.