Discounted cash flow valuation of inner mongolia yili industrial group co., ltd.

Abstract

This thematic paper analyzes the business operating situations of a leading dairy company called Yili Group. Based on the company's historical financial performance and unique strategies, combined with the industry projection, using the Discounted Cash Flow (DCF) model to estimate the share price of Yili Group, helping investors know the company's potential and growth in 5 years. After revealing the problems and risks of Yili Group, providing recommendations for improving their performance. According to the DCF analysis in this paper, it was assumed that Weight Average Cost of Capital of 6.73% and a terminal growth rate of 3.44%. our estimated share value of Yili Group is 34.93 CNY per share, which is a little higher than the latest stock price on May 3rd, 2025, which is 29.76 CNY per share. This suggests that Yili Group's share price is undervalued a little and has potential to get a higher price than its current market price, but the price trend is relatively stable. In conclusion, the recommendation for the investors is to “HOLD”.