Enterprise Value Evaluation Based on DCF Model - A Case Analysis of Hengrui Pharma

The pharmaceutical industry plays a critical role in the national economy, and the valuation of pharmaceutical companies is also a key concern for investors. There are many kinds of method to evaluate the company. We can use the Discounted Cash Flow (DCF) model and relative valuation methods, such as the Price-to-Earnings (P/E) ratio and Price-to-Book (P/B) ratio. The DCF model is a common model for company valuation. Therefore, in this paper, we evaluate the financial data of Jiangsu Hengrui Pharmaceuticals Co., Ltd from 2019 to 2023 by using the DCF model. We also show how to calculate the weighted average cost of capital (WACC) using the financial data and compare the actual intrinsic value with the result evaluated from the DCF model.