Valuation of PT Wika Realty: Should Investors Participate in IPO?
In Novermber 2017, Deputy of Restructuring and Business Development of the Ministry of State-Owned Enterprises (SOEs), Aloysius Kiik Ro said that a number of SOEs is going to become a public company and PT Wika Realty is one of it. The company has been suspending its intention to do Initial Public...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/26840 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | In Novermber 2017, Deputy of Restructuring and Business Development of the Ministry of State-Owned Enterprises (SOEs), Aloysius Kiik Ro said that a number of SOEs is going to become a public company and PT Wika Realty is one of it. The company has been suspending its intention to do Initial Public Offering (IPO) due to the incondusiveness of the market. In 2018, PT Wika Realty is reportedly ready to release its stocks in the second semester of 2018 with the maximum of 12,510,000,000 stocks with the range of price from IDR 195 – 225. <br />
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This research aims to help investors in providing data related with the prospects and fair price of PT Wika Realty. This study will examine the external analysis and internal analysis which results will be summarized in SWOT analysis and will be used in making assumptions of growth for the projections of Absolute Valuation with scenario and sensitivity analysis. This absolute valuation model will be used in this study are three stages of Discounted Free Cash Flow (FCFF) to Firm and three stages of Dividend Discounted Model (DDM). Relative valuation will also be used in this study as a comparison of the result made by the absolute valuation. The models will be used in relative valuation are forward EV/EBITA multiple and forward P/E ratio multiple. <br />
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The result of FCFF model shows the intrinsic value of PT Wika Realty amounted IDR 102 and ranging from IDR 61-148 from the pessimistic to optimistic scenario. While the result of DDM shows the intrinsic value of IDR 56 and the range of fair price IDR 47-66. The result of DDM is a third of FCFF’s, which might be caused by the payout policy and the bigger value of extraordinary growth compared to the cost of equity which resulting in negative divider of terminal growth. The result of forward EV/EBITA shows the intrinsic value of IDR 389, while the result of forward P/E ratio shows the intrinsic value of IDR 228. In conclusion, the researcher suggest investors to particpate in the IPO of PT Wika Realty due to the advantageous opportunities from the results of this study and the intrinsic value is still on the range price targeted by the management of PT Wika Realty. <br />
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