What are the valuation methods commonly used in pharmaceutical industry research?

There are two types of valuation methods: absolute valuation method and relative valuation method. There are many followers in this area on the Good Medical Generation, and in the opinion of a person in the industry, the value of global rights and interests is far greater than the value of domestic rights.

P/E valuation method.

P/E ratio Stock price earnings per share, according to the different data selected by earnings per share, P/E ratio can be divided into three types: static P/E ratio; dynamic P/E ratio; Rolling P/E ratio. **The dynamic P/E ratio is generally used when valuing the stock price and the stock price, and its calculation formula is:

Stock price = dynamic P/E ratio Earnings per share (**value).

Among them, the P/E ratio generally adopts the average P/E ratio of the sub-industry in which the enterprise is located. If it is a leading company in the industry, the P/E ratio can be increased by 10% or more; The earnings per share is selected as the best in the future, and the company can maintain a stable earnings per share (the EPS** value given in the brokerage research report can be selected).

The earnings ratio is suitable for valuing companies in the growth stage, and the industries with development prospects and imagination in the following chart have relatively high valuations. Since the P/E ratio is related to the growth rate of the company, the growth rate of different industries is different, so the P/E ratio comparison between companies in different industries is of little significance.

Therefore, the comparison of the price-earnings ratio of the source should be more with oneself (trend comparison) and more with peer companies (horizontal comparison).

2. PEG valuation method.

Valuing with a price-to-earnings ratio has its limitations. We all know that the P/E ratio represents the time it takes for the ** to recover the investment cost, and the P/E ratio = 10 means that the ** investment period is 10 years. However, the P/E ratio of some ** can reach more than 100 times, and it is not appropriate to use the P/E ratio to estimate the bright value.

This is where the PEG valuation method comes into play. That is, the P/E ratio is compared with the company's performance growth, that is, the ratio of the P/E ratio to the profit growth. It is calculated as follows:

peg=p/e÷g

P/E ratio Net profit compound growth rate (earnings per share) over the next three years

Generally speaking, the smaller the PEG when choosing **, the better, and the safer. However, PEG 1 does not mean that ** must be overvalued, if the PEG of a company ** is 12, but the PEG of companies in the same industry ** is above 15, the company's PEG may still be undervalued, although it is already higher than 1.

3. Price-to-book ratio valuation method.

The price-to-book ratio refers to the ratio of the stock price per share to the net assets per share.

Generally speaking, a lower price-to-book ratio** is associated with a higher investment value, and conversely, a lower investment value.

It is calculated as follows:

Price-to-book ratio = stock price Net assets per share for the most recent period;

Stock price = price-to-book ratio Net assets per share for the most recent period.

This valuation method is suitable for enterprises with large and stable net assets, such as steel, coal, construction and other traditional enterprises. However, it is not suitable for companies with small assets such as IT and consulting, where labor costs dominate. When analyzing, the principle of "the same withering and wide line ratio, historical ratio" is still continued, and the lower the price-to-book ratio, the safer the investment.