Valuation of Biomedical Engineering Industry Under Epidemic: Evidence from Andon Health Company Limited

Abstract

Contemporarily, under the ravages of the epidemic, nucleic acid testing has become one of the most critical preventive means, hence many nucleic acid testing companies develop rapidly in recent years. In the United States, antigen test kits have been the primary means for the past few years. Meanwhile, in the context of China’s gradual liberalization in the future, the test kit will also have a significant market space. This paper selects Andon Health Company Limited as an investigation target to discuss the valuation of the biomedical engineering industry during the epidemic. Based on the industry attributes and the circumstance of the epidemic, this paper concluded that the valuation of Andon Health is not suitable for some traditional value evaluation methods and models. According to the analysis, the valuation method based on the forecast of future cash flow is more suitable for the valuation of biomedical enterprises. Based on to the DCF valuation method, the value of Andon Health in 2022 is predicted to be 11.2 billion CNY. In this case, the current stock market price of the target enterprise is overvalued because of the biomedical enterprises’ characteristics. These results guide further exploration for valuing similar biomedical enterprises.