<p> GNC (NYSE: GNC)</p><p>Analysts: Wenqiang Xu, Qianwen Wu, Yi Liu, Zuowei Xu</p><p>Company Overview GNC Holdings, Inc., headquartered in Pittsburgh, PA, is a leading global specialty retailer of health and wellness products, including vitamins, minerals, and herbal supplement products, sports nutrition products and diet products, and trades on the New York Stock Exchange under the symbol "GNC." As of March 31, 2013, GNC has more than 8,200 locations, of which more than 6,200 retail locations are in the United States (including 958 franchise and 2,190 Rite Aid franchise store-within-a-store locations) and franchise operations in 55 countries (including distribution centers where retail sales are made). .</p><p>Current Price Current P/E DIV Yield 100 Day MA Market Cap. $58.16 21.62 1.00% 55.00 $5.52B</p><p>Industry Overview The Vitamin and Supplement Manufacturing industry is a fully mature industry and it will expand by 6.5% until 2020. Rapid growth within the industry happened earlier in the late 90's after Congress passed the Dietary Supplement Health and Education Act (DSHEA). The act stated that vitamins and botanical supplements could be categorized as dietary supplements, thus leaving these products exempt from the strict testing standards of the FDA. During the 10 years to 2018, industry value added, which measures an industry's contribution to GDP, will not grow any further due to the DSHEA spurring industry maturation. The advent of the internet and e-commerce have stimulated changes in the supply chain by facilitating direct and cheaper marketing tools for producers. </p><p>Financial Analysis, Projection and Valuation The analysts assume revenue from all products to increase by 10% annually up to 2017. We expect EBIT margin to increase up to 2017. The cost of equity was determined by using 70% weight on CAPM implied return on equity and 30% weight on expected ROE for 2013 to reflect the business risk the company. DCF model gives an implied stock price of $66.10. We used 4 companies to calculate comparable company valuation using a number of prices and enterprise value multiples. The following table summarizes valuation results.</p><p>DCF Comparable $66.10 $60.76</p><p>Risks Increased regulation – Changing consumer behavior – Price Competition – Regulation</p><p>Recommendation As current (Dec 9, 2013) stock price, $58.16, is below the implied price per share from comparable company analysis and above DCF price, we recommend buying the stock 100 Shares at market price. </p><p>NOVEMBER 12, 2013 Page 1</p>