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The valuation of pt. Indocement tunggal prakarsa by using discounted cash flow

Fikri Haikhal, Sylviana Maya Damayanti

Abstract


Abstract. The experiences of Asian economies such as Japan and Korea point to the fact that infrastructure development is a key driver of economic development (Kim, 2006, cited in Isaac & Olayide, 2018). This states that the main key in a country's economic development is supported by how well the country's infrastructure develops in other words the economy and infrastructure should have a reciprocal relationship. Specifically, the impact of Indonesia's infrastructure development is felt by one of the cement companies in Indonesia, PT Indocement Tunggal Prakarsa Tbk, which will be referred to as INTP. The strategy made by the INTP was apparently not enough to bring great profits to INTP. Some investors consider that INTP is not feasible or is said to be overvalued with its current conditions based on Bloomberg consensus, of the 20 analysts who cover INTP shares, there are 13 analysts who provide hold recommendations, 12 sell recommendations and 5 buy recommendations. So from that the purpose of this study is to find out what is the appropriate value for INTP for investors with the economic conditions described earlier. To find out the intrinsic value of INTP, the author uses the DCF Valuation method, which is a discounted cash flow assessment. The author also prepares equity costs, debt costs, capital costs, FCFE projections, growth rates, and terminal values for discounted cash flow assessments. The results of this study state that INTP intrinsic value is overvalued compared to market value. This study can provide recommendations to investors and also PT Indocement Tunggal Prakarsa Tbk.

Keywords : Infrastructure Sector, Financial Performance, Relative Valuation, Discounted Cash Flow Valuation

 

The valuation of pt. Indocement tunggal prakarsa by using discounted cash flow


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