VALUATION OF PT. TIGA PILAR SEJAHTERA,TBK : THE IMPACT OF CORPORATE RESTRUCTURING IN 2016

• Main Author: NURUL AINI 29114909, RINI
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/24008
• Institution: Institut Teknologi Bandung

2015 has been a tough year for most of industries because of the slowdown in global economy <br /> <br /> <br /> <br /> which has an impact on the decline in the growth of industries. The condition also affects one <br /> <br /> <br /> <br /> of the largest companies that engaged in the food industry, PT. Tiga Pilar Sejahtera <br /> <br /> <br /> <br /> (AISA),Tbk. Since 2014, the company has not only focused on its food products but also <br /> <br /> <br /> <br /> expanding by entering the agribusiness industry that produce palm oil . After 2 years running <br /> <br /> <br /> <br /> the business segment of agriculture, the company decided to divest this business segment. It is <br /> <br /> <br /> <br /> inseparable from the global economic condition in 2015. The decreasing in palm oil demand <br /> <br /> <br /> <br /> affects the selling price which was also decreasing in that period. This condition forces the <br /> <br /> <br /> <br /> company to divest the business segment of agriculture in the 2 <br /> <br /> <br /> <br /> nd <br /> <br /> <br /> <br /> quarter of 2016 so it would <br /> <br /> <br /> <br /> not distrupt the performance of the parent company. After the divestment, AISA plans to <br /> <br /> <br /> <br /> focus on its food business segment, especially rice mills by adding new factories to increase <br /> <br /> <br /> <br /> the production capacity. <br /> <br /> <br /> <br /> <br /> The business issue raised is the necessity to update the the review of AISA’s prospect in the <br /> <br /> <br /> <br /> future. Throughout 2015, the stock price of AISA was decreasing significantly. As 31 <br /> <br /> <br /> <br /> <br /> December of 2015, the stock price of AISA declined by 41.40% yoy meanwhile the <br /> <br /> <br /> <br /> composite index recorded the decreased by 11.14% yoy. This is inseparable from negative <br /> <br /> <br /> <br /> sentiment from the investors to the business segment of agriculture. With the company’s <br /> <br /> <br /> <br /> restructuring by divesting the business segment of agriculture in May 2016, AISA wants to <br /> <br /> <br /> <br /> focus on its food business segments,especially rice mills segment which contributed the most <br /> <br /> <br /> <br /> to AISA’s revenue. <br /> <br /> <br /> <br /> <br /> The analysis is conducted by valuation update using absolute valuation model and relative <br /> <br /> <br /> <br /> valuation model. For the absolute valuation model, the method used is discounted cash flow <br /> <br /> <br /> <br /> with free cash flow to firm (FCFF). Meanwhile, the relative valuation model is using price <br /> <br /> <br /> <br /> earnings ratio (PER) and enterprise value per EBITDA (EV/EBITDA). Both of valuation <br /> <br /> <br /> <br /> model is used to determine the fair price of AISA stock price. By using those methods, it is <br /> <br /> <br /> <br /> concluded that the fair price of AISA is IDR 1463.69 with potential upside 21.47% from the <br /> <br /> <br /> <br /> captured price IDR 1205 (1 <br /> <br /> <br /> <br /> st <br /> <br /> <br /> <br /> of August 2017) PER of 12.44 (premium 4.90%) which indicates <br /> <br /> <br /> <br /> st <br /> <br /> <br /> <br /> that the AISA’s sentiment in food industry is positive and EV/EBITDA of 8.70 (premium <br /> <br /> <br /> <br /> 9.98%) which indicates that AISA has a better performance compared to its peers companies. <br /> <br /> <br /> <br /> <br /> From the result of the analysis of internal and external of the company and also valuation <br /> <br /> <br /> <br /> analysis, then the investors are recommended to buy the AISA stock that has a target price of <br /> <br /> <br /> <br /> IDR 1463.69 with a potential upside of 2.47%. Considering the better internal condition after <br /> <br /> <br /> <br /> restructuring and the opportunities in the future, AISA overtures the promising prospect to the <br /> <br /> <br /> <br /> investors. <br />