Equity Research in Chinese Food Retail Industry: the case of YONGHUI SUPERSTORES CO., LTD

This is a project that aims to provide informed investment recommendations regarding YONGHUI SUPERSTORES CO., LTD., a Chinese supermarket chain company through comprehensive forecasts of behavioral outlook. This equity research investigates the financial performance of YONGHUI SUPERSTORES CO., LTD. in the context of the Chinese food retail industry outlook. This equity research complies with the format recommended by the CFA Institute. There are two motives to select this Chinese food retailor. The first motive is my personal interest in food retailing, and my advantage as a native speaker of Chinese, which enables me to have deeper insights of the company. The second motive is the typicality of YONGHUI as a traditional supermarket chain of China in transition. This equity research is elaborated based on public information disclosed until the 19th of September 2022. The principal methods used in the valuation are Discounted Cash Flow as well as Relative Valuation method. It is recommended to hold the stock of the company with a 2022YE price target of CNY 3.39 per share, forecasting a 1.51% upside potential from the September 19th, 2022, at closing price of CNY 3.34 per share, associated high level. Meanwhile, based on Relative Valuation Model, 2022YE price target ranges from CNY 6.58 to CNY 7.35.