STOCK VALUATION OF PT INDIKA ENERGY: IMPACT OF ACQUISITION KIDECO JAYA AGUNG

• Main Author: SETIAWAN RUSLI/29116072, ALVIN
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/25424
• Institution: Institut Teknologi Bandung

A fluctuation of the price of the energy commodity in several years affected the energy companies around the world including Indonesia energy companies. Most of the company that selling coal experienced an increase in revenue in 2017 due to rapidly rising coal price in 2017. The increase in revenue in 2017 also experienced by PT. Indika Energy, Tbk. (INDY) and some of INDY subsidiaries especially Kideco Jaya Agung that fully acquired by INDY in December 2017. INDY revenue increased 41,7% in 2017, and the core profit of INDY also increased 318%. The increase in revenue and core profit also affected the stock price of INDY that increased significantly from IDR 705/shares at the end of 2016 to IDR 3.060/shares at the end of 2017. This final project conducted to examine the impact of the acquisition of Kideco Jaya Agung, the third largest coal producer in Indonesia on INDY profits by identifying some factors and condition that might affect the intrinsic value and performance of the company. This final project also aims to know that the shares of PT. Indika Energy, Tbk (INDY) is undervalued or overvalued than the market price. The valuation process in this final project conducted using absolute and relative valuation model. INDY revenue in 2018 projected to increase 191% from revenue in 2017 due to the acquisition of Kideco Jaya Agung. The result of absolute valuation the stock price, obtained the intrinsic value of IDR 3.391/shares with potential upside 10,81% from market price, which means that the INDY stock is undervalued by the market. The results of the relative valuation also showed the stock of INDY is undervalued by potential upside 26,8% and 56%. Based on the results of the valuation the recommendation for investors is to BUY INDY’s stock because INDY stocks still undervalued by the market.