STOCK VALUATION OF PT PP PROPERTI TBK (PPRO): CAPITALIZING THE GROWTH OPPORTUNITY OF THE COMPANY

• Main Author: AL ASRA - 29115079, ERFANDI
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/26949
• Institution: Institut Teknologi Bandung

Turbulences in global economy, weakened customers purchasing power, high housing credit and high housing product price makes property industry is experiencing a declining trend throughout several years. These conditions create negative sentiments that is affecting the property industry performance in the market. On the other hand, Property industry is one of the industries that have a lot of opportunity to grow, since the products that is sold by the property industry is housing product which is a basic need for humanity. Indonesia’s government also try to stimulate the customers purchasing power through several policies that can ease them to own the housing products. With that opportunities, Property industry should have more value rather than what they experiencing in the capital market right now. Many of the company in the property industry also already to invest and improve their products more so that the customers can reach their product and increase their performance in the industry. One of the companies that is try to grow is PT PP Property Tbk (PPRO). <br /> <br /> PPRO is one of the property company whose main focus is on the high-rise building. PPRO also provide landed housing, and property services such as rent, hotel and building management to their customers. To develop their performance, PPRO is trying to add more landbank to have more property products, also they try to improve their product using technology and innovation on their product. Fundamentally, PPRO is a good company to invest to, but PPRO performance in the capital market right now is declining because of the negative sentiments that is occurred in the industry. The purpose of this paper then is to know the real value of PPRO compare to their current value in the market. This paper also investigating the impact of the corporate actions to improve their business to the company’s stock price by identifying also the business environment of the company both internal and external conditions. <br /> <br /> This paper is using the Discounted Cash Flow valuation method, using FCFE (Free Cash Flow to Equity) to measure the company real value. To do the valuation, author first must obtain the data by using the internal and external analysis of PPRO to have an assumption that is then used to make the valuation. Author also using the relative valuation method by comparing PPRO to its peer companies which is Modernland (MDLN), Intiland (DILD), and Jaya Real Property (JRPT). These companies are chosen by the similarity of the company to PPRO. Author also compares PPRO current performance with the peer companies using the financial ratio analysis to get more insight about the performance of the PPRO. <br /> <br /> As the final results, after analyzing the business environment and calculate the valuation, the recommendation is to BUY PPRO’s stock as the stock is currently being undervalued based on the calculations using Absolute valuation and the Relative valuation. Even though the value of PPRO stock in the capital market is currently being low, but the real value of the company is higher than what it is stated in the market. <br />