Cash Flow Model Research Articles

Drug pricing models, no 'one-size-fits-all' approach: a systematic review and critical evaluation of pricing models in an evolving pharmaceutical landscape.

Access to new medicines is crucial for patients but increasingly sparks discussion due to high prices. Simultaneously, the growing emphasis on specialized products and uncertainty surrounding the long-term effectiveness of new drug classes brought to the market underscore the need for innovative pricing approaches. A systematic literature review of pharmaceutical pricing models, accompanied by a critical appraisal, was conducted to offer insights contributing to novel approaches balancing sustainable pharmaceutical innovation with affordability and accessibility for patients. Six different pricing models are identified: value based pricing, basic cost-based pricing, and four more comprehensive pricing models incorporating numerous elements: the cancer-drug-pricing model, AIM model, (Nuijtens) discounted cash flow, and the real-option rate of return method. Although there are many similarities among the models, each has unique assumptions for implementation. For instance, all models except for the standard incremental cost-effectiveness ratio and basic cost-based pricing consider the number of eligible patients and the remaining patent period. Only the AIM model and the Nuijtens discounted cash flow model use lump sums. Both the latter and the real-option rate of return method explicitly include the cost of capital as a major cost-based component. Recognizing the diverse applications of each model highlights the need for more differential and dynamic pricing tailored to the characteristics and therapeutic areas of each drug. Additionally, the study underscores the importance of cost transparency in achieving this goal. Consequently, these findings can help stakeholders develop sustainable and affordable drug pricing mechanisms that address the complexities of the ever-changing pharmaceutical landscape.

Analisis Penilaian Atas Harga Wajar Saham Menggunakan Metode Discounted Cash Flow (DCF) dan Dividend Discount Model (DDM) Untuk Pengambilan Keputusan Investasi (Studi pada Indeks LQ-45 Periode 2018-2022)

This study aims to analyze a stock fundamentally in the LQ-45 Index for the 2018-2022 period using absolute methods, namely the Dividend Discount Model (DDM) and Discounted Cash Flow (DCF) methods so that it can be seen whether the stock condition is undervalued, overvalued, or fairvalued and this will also provide an investment decision recommendation for investors. This type of research is quantitative with a descriptive approach. The main object of research is companies included in the LQ-45 index for the period 2018-2022. This research sampling technique uses purposive sampling so as to produce as many as eight companies in accordance with certain criteria. The results of research using the Dividend Discount Model (DDM) method show that some stocks in undervalued conditions are in ASII, BBNI, BMRI, ICBP, INDF, and TLKM stocks. Then for stocks in overvalued conditions there are ANTM and HMSP shares. In using the Discounted Cash Flow (DCF) method, stocks in undervalued conditions are ANTM, ASII, BMRI, and INDF shares. Then for stocks in overvalued conditions are BBNI, HMSP, ICBP, and TLKM. The results of determining the most accurate method between Discounted Cash Flow (DCF) and Dividend Discount Model (DDM) where the results of measurements using Root Mean Square Error (RMSE) show that the Dividend Discount Model (DDM) method is more accurate in this study.

Cash Flow Dynamics: Amplifying Swing Models in a Volatile Economic Climate for Financial Resilience and Outcomes

In a volatile economic climate, understanding cash flow dynamics is crucial for companies to improve financial resilience and outcomes. This research focuses on amplifying swing models such as Cash Flow Management (CFM), Solutions (CFS), Dynamics (CFD), Boosters (CFB), Innovations (CFI), and Strategic (CFS) - on cash flow dynamics in a volatile economic climate. By examining the relationship between these models and determinant variables, the study aims to provide insights that can assist companies in achieving financial resilience and outcomes. The data were collected from finance and accounting representatives of 200 companies ((manufacturing (107), services (56), and trade (37)) in Kosovo in 2023 (quarters 1, 2, 3, and the first two months of quarter 4), while processing was done through exploratory factorial, reliability, and multiple regression analyses conducted using SPSS and AMOS software. The results of the study reveal a significant relationship between each cash flow model and the determinant variables. This highlights the importance of these models in comprehending cash flow dynamics within a volatile economic climate. Factors such as optimization strategy clarity, continuous monitoring, effective working capital management, accurate financial decision-making, and technological improvements contribute to positive cash flow. Additionally, precise management of fluctuations, financial advantage, cooperative departmental approaches, and effective communication also play a role in cash flow dynamics. By extending swings models, the study provides valuable insights that can assist firms in achieving financial resilience and overcoming the challenges of a volatile economic environment.

Valuation Analysis of the Medical Beauty Industry Based on DCF Valuation

Contemporarily, with the development of China people who live in China have increase income. People have more attention of their appearance and the pursuit of quality of life is getting higher and higher, that the medical beauty Industry develop rapidly. The companies develop vigorously because consumers demand continues to increase nowadays that many companies in the medical beauty industry have investment value. However, some scholars query that why the company in the medical beauty Industry have such high valuation. Therefore, this study examines the leading enterprise in the medical beauty Industry called Aimeike, by means of collect and sort out the relevant data of Aimeike, used the discounted future cash flow model to analyze the valuation about Aimeike, on this account reflects whether the overall valuation of the medical beauty industry is on the high side. In order to provide investors some investment orientation and this study will offer some examines for the companies in medical beauty industry. During the research, there are high valuations in the medical beauty industry.

Levelized Cost and Carbon Intensity of Solar Hydrogen Production from Water Electrolysis Using a Scalable and Intrinsically Safe Photocatalytic Z-Scheme Raceway System

The realization of an environmentally sustainable and widely-adopted hydrogen economy may require lowering hydrogen production costs of production pathways with ultra-low greenhouse gas emissions to $1/kg H2. The allocation of new or existing renewable electricity generation solely to hydrogen production remains contentious due to disputes regarding emissions accounting. Photoelectrochemical (PEC) hydrogen production technologies offer a unique solution, as hydrogen is produced directly from solar energy and water, without the need for electricity generation. However, cost projections for past photoelectrochemical designs have suggested that they are not cost competitive compared to conventional electrolysis systems manufactured at scale. Herein, we offer the first illustrative benchmark of cost and carbon intensity of hydrogen produced in a Type 2 Z-scheme photocatalytic reactor design that employs suspended semiconducting nanoparticles organized in two stacked baggies in a raceway design.To explore the near-term and future cost projection for hydrogen production via Type 2 photocatalytic Z-scheme raceways, the authors developed a bottom-up total installed capital cost model. This project cost model incorporates: 1) raceway reactor cost, derived from a Design for Manufacturing and Assembly (DFMA) process-based cost model, 2) mechanical balance of plant, including process equipment, piping, valves, and instrumentation, derived from equipment quotes, scaling, database values, and Aspen estimates; 3) electrical balance of plant, including wiring, derived from time and material cost correlations; 4) Site Preparation, focused on green field installation; and 5) Construction Overhead, including engineering, procurement, and construction (EPC) costs and project contingency. The capital cost model is fed into a Levelized Cost of Hydrogen (LCOH) discounted cash flow model that accounts for electricity and water consumption, in addition to other operating costs, including labor, maintenance, and raceway replacements.A hybrid life-cycle approach was used to develop an inventory of greenhouse gas emissions from all materials and energy flows associated with the facility life cycle. These flows are converted to emissions based on specific emission factors, or by using physical units-based input–output LCA models associated with the broader economic impacts of fuel and materials production, use, and end use.Estimates for levelized cost of hydrogen suggest that a 50 metric ton H2 per day (MTD) raceway plant can approach $2.50/kg H2 at an 8% solar-to-hydrogen efficiency with further cost improvements possible through increased performance and larger plant scales. Carbon intensity is estimated to be well under clean hydrogen targets for global warming potential of <2-4 kg CO2e/kg H2 produced. The results suggest a highly competitive and scalable technology, that justifies further experimental validation and prototyping in the field. Figure 1

Economic and sustainability prospects for wet waste valorization: The case for sustainable aviation fuel from arrested anaerobic digestion

Valorizing wet wastes to sustainable aviation fuel (SAF) can be achieved through sequential arrested anaerobic digestion (AAD) to volatile fatty acids (VFAs) and thermochemical catalytic upgrading. Alternatively, conventional anaerobic digestion (AD) can use wet waste to produce biogas (for electricity generation), biomethane, or green hydrogen. To assess the VFA-SAF pathway, we conducted a comprehensive techno-economic analysis (TEA) of each approach using Aspen Plus and discounted cash flow models, coupled with life cycle assessment (LCA) to estimate fuel carbon intensity (CI) and evaluate the implications of policy incentives for carbon emissions reduction.First, we calculated the minimum fuel selling price (MFSP) required to meet a 10 % internal rate of return (IRR) for each product without policy incentives. In this scenario, all pathways faced challenges in meeting the market values of equivalent fossil-based products. Next, we examined projected costs for alternative sustainable technologies and found that SAF and biomethane from wet waste were competitive, while electricity and hydrogen costs were significantly higher. Finally, we incorporated current policy incentives; with incentives, all pathways exceeded a 10 % IRR using fossil-equivalent selling prices. Among all the options considered, VFA-SAF produced the most profitable carbon-negative fuel that was economically competitive with alternative sustainable technologies.

Practice Briefing: The implications of a move towards explicit discounted cash flow (DCF) models for property investment valuations

PurposeThe primary purpose of this Practice Briefing is to examine the implications of the recommendations of the Royal Institution of Chartered Surveyors (RICS) Review of Investment Valuations to shift towards (explicit) discounted cash flow (DCF) valuations on valuers, clients, risk management and market data.Design/methodology/approachThis Practice Briefing will develop a conceptual framework to articulate the impact of the shift towards explicit modelling assumptions in valuations. A comparative analysis is conducted to contrast traditional valuation approaches with an explicit DCF approach.FindingsThe proposed shift to DCF valuations in the real estate industry carries both subtle and profound implications. While on the surface, the move appears to bring minimal change since current valuations are already DCF-based, a deeper exploration reveals a potential transformation to the understanding, analysis and measurement of pricing and risks in commercial real estate.Practical implicationsThe traditional techniques adopted in valuations have become pervasive in the industry, hindering more sophisticated modelling and analysis of individual assets and portfolios. Explicitly modelling assumptions in both the initial years of cash flow and perpetuity calculations would unveil fundamental relationships and rationales that have previously been buried within, and perhaps ignored by, an All Risks Yield (ARY).Originality/valueThis briefing identifies the cause of confusion when interpreting ARY differentials on implied target returns and risk and demonstrates how a change to explicit assumptions, such as growth and letting periods, would enhance transparency, enabling more informed client–valuer discussions, which in-turn will boost confidence in valuation accuracy, lead to more sophisticated asset modelling, market data, forecasting and market analysis.

EARNINGS QUALITY AND NATIONAL IPO: REM PRACTICES OF CENTRAL ASIA

Abstract. The study aims to assess the impact of the National IPO/SPO Program on Earnings quality in KASE-listed companies and provide recommendations to the investor community. KASE Stock Exchange sample population is 52 local companies, 26 state and 26 private, across different industries excluding financial institutions and investment holdings. Time horizon is 13 years during 2009-2021period totaling 572 unbalanced panel firm-year observations. To estimate Earnings quality, we follow Kasznik cash flow model for accrual-based Earnings management jointly with real activity Roychowdhury aggregate model. We found that the National IPO/SPO process creates partial state-owned enterprises and improve their key investment indicators. Partially state-owned companies outperform private ones and thus become the preferable investment strategy based on Earnings quality risk, cash generation, profitability and leverage-based risk. To strengthen our analysis we compare main results with another popular measurement of accrual-based Earnings management based on the Shivakumar 1996 model. We also winsorised key investment indicators to estimate the impact of outliers on the main results. Theoretically, this study is the first to analyze Earnings management from the National IPO/SPO perspective and the first to relate Earnings quality with structure ownership in case of Kazakhstan. Practically, results and discussion are useful for investors of KASE-listed companies in investment decision-making. Keywords: Earnings quality, Ownership structure, Earnings management, Kazakhstan, National IPO/SPO, KASE

Impact of the net-metering policies on solar photovoltaic investments for residential scale: A case study in Brazil

The adoption of renewable energy resources is in the core of energy transition. However, its implementation can be highly impacted by country policies. A limited number of researches investigated solar photovoltaic investments, comparing net-metering rules for distinctive energy consumption levels and different discounted rates, from the investors’ point of view. This paper analyzes the impact of Brazilian net-metering rules on solar photovoltaic investments, considering residential scale. The methodology contemplates the development of a Discounted Cash Flow model to calculate Discounted Payback (DP), Net Present Value (NPV), Internal Rate of Return (IRR), and Levelized Cost of Electricity (LCOE) of projects. The case studies consider the impact of Brazilian regulation from net-metering rules (previous, considered, and current), energy consumption levels (Low, Middle, and High), and discount rates (5 %, 10 %, 15 %, and 20 %). The results show that from the previous to current rule the return for investor, on average, decreased 5.77 %. However, this reduction would be of 12.81 % if considered rule was adopted. For the 36 studies carried out, even in the worst case the investments remain viable. Therefore, the existing policy is suitable for the current stage of sector development; minimizing the impacts for energy tariff, distribution companies, consumers, and prosumers.

Case Study of Enterprise Value Assessment

Along with the gradual advancement of the deepening reform of our country's socialist market economy and the further optimization of resource allocation, the restructuring, investment, acquisition and merger of enterprises are becoming increasingly frequent economic activities. The evaluation of the value of the target enterprise is one of the important links. This paper takes the small household appliance industry as the starting point, takes the small B Electric Appliance Co., Ltd. as an example, and uses the discounted free cash flow model in the income method to estimate its market value. It can reflect that this method is conducive to providing detailed and solid basis for value assessment relatively comprehensively from the aspects of enterprise profitability, profit quality, future profit sustainability, expected rate of return of the industry in which it is located, and time cost of funds, etc., and is widely used in the capital financial market and market information disclosure requirements.

A Study on Capital Budgeting Techniques and preparation of DCF Model of NVIDIA Corporation

This study delves into the application of capital budgeting techniques in Nvidia Corporation, a global leader in graphics processing units (GPUs) and artificial intelligence (AI) technologies. Through secondary data analysis sourced from various reputable sources including webpages, case studies, and annual reports, the study aims to evaluate the impact of capital budgeting techniques on investment decision-making, assess the profitability of Nvidia, calculate its Net Present Value (NPV), and provide actionable suggestions for enhancing profitability and diversifying investment decisions. Additionally, a Discounted Cash Flow (DCF) model is prepared to forecast future performance and guide strategic planning. Limitations such as incomplete information, biased sources, and limited data availability are acknowledged, yet the study offers valuable insights into the strategic financial management of a technology giant like Nvidia.

Aligning stars: making LNG imports happen in Australia

We present the inputs and results of a discounted cash flow model which details the requirements for an import terminal to eventualise. The key requirement is high certainty cash flows from foundation users. This can be made possible through capacity booking which can be potentially underwritten by governments to ensure security of supply during peak winter months. The out-chartering of the floating storage and regasification unit (FSRU) to serve as a liquefied natural gas (LNG) carrier during the peak northern winter will provide an additional revenue source. We also analyse the legacy supply decline and various price setting mechanisms for the southern states which will soon turn net importers. We will describe the status of the four projects in the pipeline and identify milestones. We conclude that an import terminal provides an alternative proposition in the southern states considering the highly seasonal demand profile, the decline of Gippsland Basin production, and the relative inflexibility of coal seam gas. Further, FSRUs can be redeployed to other regions, which reduces stranded asset risk from pipeline expansions, given Australia’s net zero targets.

Dependence of Investing Strategies on Expected Discounted Rate

The Discounted Cash Flow model is a cornerstone in the fields of corporate finance and investment valuation, serving as a crucial decision-making tool for stock valuation. Driven by the motivation of searching for the dependence of different investing strategies on expected discounted rates, the article compares the valuations of two types of hypothetical net free cash flows under the same fluctuation of discounted rates, representing the stable and aggressive growth of companies. Modeling studies are then supported by regressing different representative indexes on the yield-to-maturity of China's 10-year treasury bond. A larger dependence on treasury yield is shown in valuable stocks than in grow-up stocks. The work uses a hypothetical model to explain this phenomenon from the perspective of investors. Valuable stocks investments give greater weight to assessments of the macro environment because of lower sensitivity and predictable patterns, whereas grow-up stocks investors base their careful assessment of the volatile valuation of start-ups less on the standard rate, even though it implies a risk-free rate.

Effects of the U.S. inflation reduction act on SMR economics

The U.S. Inflation Reduction Act (IRA) of 2022 provides a wide array of tax credits and other incentives for low-carbon energy. The technology-neutral clean generation production tax credit (PTC) (Section 45Y of the U.S. Internal Revenue Code) and the technology-neutral investment tax credit (ITC) (Section 48E) lower the net cost of new electricity generation projects with zero or negative greenhouse gas emission rates. We evaluate the impact of the IRA legislation—specifically the PTC and ITC—on the cost-competitiveness of small modular reactors (SMRs). We use the Argonne Low-carbon Energy Analysis Framework (A-LEAF) model to calculate the capacity factor of an SMR with a range of hypothetical variable operating and maintenance (O&amp;amp;M) costs in the Electric Reliability Council of Texas (ERCOT) electricity market. We selected ERCOT for market modeling because of its competitive structure, available data, and extensive use in prior literature. We use a discounted cash flow model to calculate the SMR’s net present value based on the market prices and capacity factors from A-LEAF, hypothetical ranges of capital and variable O&amp;amp;M costs, and other input parameters, with or without the IRA tax credits. We determine the SMR owner’s optimal choice of PTC or ITC for the hypothetical ranges of capital and variable O&amp;amp;M costs. We also evaluate potential shifts in the SMR owner’s optimal choice of PTC or ITC based on historical patterns of nuclear capital cost overruns in the United States. We also assess the sensitivity of our results to longer PTC period and electricity prices from the New England market, which tend to be higher than electricity prices in ERCOT. We find that even with the IRA tax credits, only SMRs with low capital and variable O&amp;amp;M costs would be economically feasible in the low-price ERCOT market scenario modeled. A longer PTC period and higher-price market such as New England, however, would significantly expand the economic feasibility of SMRs in the United States.

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Different equity valuation models in theory provide identical estimates of equity intrinsic values if they are implemented with consistent assumptions. In practice, it is not unusual to obtain different value estimates from different models. Prior research on the comparison between multiples-based valuation model and flowsbased valuation models are quite limited. This research contributes to the literature by comparing the accuracy and reliability of three flows-based valuation models (discount dividend model, discounted free cash flow model, residual income valuation model) and multiples-based valuation model using one-year forward forecasted earning (PE1). For the analysis, all models are tested for bias, accuracy and explainability using t-tests, Wilcoxon tests and OLS regressions with a large sample of 40.547 observations from U.S public firms during the period from 2010 to 2020. Results show that PE1 value estimates are more accurate and reliable than that of flows-based models; and among flows-based models, residual income valuation model performs best. This research provides evidence for the performance and usage of such models to support sell-side equity analysts while making decisions of which model to use.

Earnings quality and national IPO: AEM practices of Central Asia

Once the key insights of corporate finance quality in Kazakhstani listed state SOEs are obtained, it is time to turn to separate strategies of corporate reporting manipulations. The purpose of this research is to look at accrual-based AEM strategies that adjust real activity REM practices at year-end. We follow Kasznik cash flow model for accrual-based earnings management as a best practice methodology and apply it to 572 unbalanced panel firm-year non-financial observations over 13-year time horizon. To strengthen our analysis, we compare main results with another popular measurement of accrual-based Earnings management based on the Shivakumar 1996 model. We also winsorised key investment indicators to reduce the impact of outliers on the main results. The results answer major questions: 1) what AEM strategies state SOEs prefer; 2) how accrual-based manipulations affect the choice of investment indicators; and 3) whether partially-privatized state SOEs under/over perform private POEs in Kazakhstan. In terms of theoretical and practical implications, our research findings could be useful to analysts of various strategies in the AEM/REM dimensions, academic scientists and advocates of partial privatization of state companies. We assure that theoretical gaps of corporate data manipulations in Central Asian context are to be reduced with increasing number of publications in the field of AEM practices.

코스닥시장에서 기업의 ESG 경영이 대리인비용에 미치는 영향에 관한 연구

Purpose: The purpose of this study is to verify the effect of a company’s ESG management on agency costs. For this purpose, the dependent variables used in this study were the asset turnover variable representing the level of effort of the manager, the entertainment cost ratio representing the private consumption of the manager, the sales and management cost ratio, and the surplus cash flow ratio. If the company’s agency cost expenditure is affected by the influence of the company’s ESG management, the importance of the company’s ESG management is proved.&#x0D; Research design, data, and methodology: As a result of the verification, it was confirmed that a company’s ESG management activities had a positive effect on the company’s asset turnover rate. These results indicate that the company’s active ESG management activities contribute to increasing the company’s asset turnover rate by properly controlling the discretion of the manager. Second, some valid results were derived from the result of selecting the entertainment cost ratio as a substitute for agent cost. On the other hand, significant results were not found in the sales cost, management cost, and surplus cash flow model.&#x0D; Results: This research results are as follows. First, service orientation of salespeople was found to have a positive effect on customer’s economic value. Second, it was found that the customer orientation and service orientation of the salespeople had a positive effect on the psychological value, and sales orientation was found to have a negative effect on the psychological value. Third, it was found that economic value and psychological value had a positive effect on customer satisfaction.&#x0D; Implications: In conclusion, it was partially confirmed that the KOSDAQ market is playing a positive role in the company’s management performance by properly controlling agent costs through ESG management activities. These results will serve as a basis for improving the company’s management performance by establishing a mechanism that can reduce agent costs within the company, and it is also believed that it will serve as a basis for policymakers to come up with a plan for the natural establishment of such a control system within the company.

Evaluating Financial Risks of Carbon Capture in the Oil &amp; Gas Industry Using Advanced Machine Learning Techniques

This paper thoroughly examines the financial risks and opportunities related to implementing carbon capture and storage (CCS) in the oil and gas sector. We utilize sophisticated machine learning techniques to create a robust methodology for measuring CCS projects’ economic feasibility and risk level. Our approach encompasses various crucial factors, such as investment costs, operational expenditures, carbon pricing, and the oil and gas market dynamics. By utilizing discounted cash flow modeling, sensitivity analysis, and Monte Carlo simulation, we produce probabilistic financial results that offer valuable insights for decision-makers. The findings emphasize the crucial significance of policy backing, technological progress, and strategic portfolio management in influencing the financial outcomes of CCS investments. This study enhances the comprehension of Carbon Capture and Storage (CCS) as an essential instrument for reducing carbon emissions in the oil and gas industry while effectively managing the intricate financial aspects of transitioning to cleaner energy sources.

Stock Valuation of Telecommunication Provider in Saudi Arabia with the Case Study of Tawal Spin-Off of Saudi Telecom Company (STC)

This study investigates the stock valuation implications of the strategic spin-off plan involving Tawal, the biggest telecom tower infrastructure provider in Saudi Arabia, a 100% owned subsidiary of the Saudi Telecommunications Company (STC). Saudi Public Investment Fund (PIF) has sent a nonbinding offer to acquire 51% of Tawal's shares from the STC group, which is aligned with the Saudi Vision 2030 strategy. The findings of this research contribute nuanced insights into the relationship between spin-offs and stock valuation within the context of the telecommunications industry. By scrutinizing the anticipated impact of the Tawal spin-off on STC stock price, this study provides valuable information for investors and the STC group navigating the strategic decisions and their implications for the stock value. The research employs a comprehensive stock valuation framework with absolute-relative valuation, internal-external analysis, and risk assessment to gauge the potential effects on STC's respective stock values of the Tawal spin-off. Comparative analyses conducted within the telecommunications sector in Saudi Arabia offer valuable benchmarks for assessing the performance of STC Group. According to the intrinsic valuation approach and the Discounted Cash Flow model, STC stock price is undervalued compared to the stock price of 19th November 2023 by 38.3 SAR. Assuming the spin-off failed, obtaining the fair price at 41.5 SAR per share based on the DCF model and 54.2 SAR based on the relative valuation PE ratio. If the Spin-off is agreed upon and concluded, the fair price is valued at 42.6 SAR per share based on the DCF model. Sensitivity analysis and Monte Carlo simulation resulted in two results: the gross profit margin is a sensitive variable of the stock price movement, and the buy option is preferable. In line with that, STC has a solid holding organization, is financially healthy, and has sustained a competitive advantage. STC is expected to deploy the liquidity into investment and expansion in the region and globally, generating a higher return to satisfy the investor interest.

Comparison of The Dividend Discount Model and The Discounted Cash Flow Model Valuation of Stock Kweichow Moutai

Stock valuation is an essential element of investment analysis, aiding investors in gauging a company's true worth. This essay conducts a literature review and a thorough demonstration of the calculation process, focusing on the Discounted Cash Flow (DCF) Model and the Dividend Discount Model (DDM), as key tools in stock valuation. The research examines the valuation of Kweichow Moutai Co., Ltd., a prominent Chinese company in the beverage industry. The results yielded significant disparities from the market price, with the DCF model indicating potential overvaluation by approximately -33.39%, while the DDM model pointed to an even greater overvaluation of about -77.94%. These findings underscore the complexity of stock valuation and the need for a comprehensive approach. Investors should not solely rely on market sentiment but should combine these models with extensive research and a diversified portfolio strategy.