ABSOLUTE AND RELATIVE VALUATION MODELS TO ACCOMMODATE PRE-IPO APPRAISAL OF AN AIRPORT AUTHORITY

• Main Author: Faidz Yasser Arafat, Muhammad
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/33861
• Institution: Institut Teknologi Bandung

Public investors are more enthusiastic to put in their money if the stocks they are about to purchase belong to companies that are owned by the government as opposed to those that are owned by private entities. OJK (Indonesia’s Financial Services Authority) has continued to encourage state-owned enterprises and their subsidiaries to give Initial Public Offering (IPO) a go and become public-listed companies. State-owned enterprises and their subsidiaries ergo strive to move forward with the IPO. Among those state-owned enterprises is Angkasa Pura II. Having almost no immediate competitors within the industry, the Company has continued to provide airport and airport related services for the aviation industry of the western part of Indonesia. The Company was always vocal in terms of resourcing the open public for capital. In 2016, Angkasa Pura II had proceeded to issue company bonds valued at a total of IDR 2 trillion. The Company’s move on the obligation issuance was to help usher in the Company’s planned IPO in the future. Angkasa Pura II had plotted to place a new capital to be sold to public at IPO that amounted to 25% of the total capital that was already authorized by the Company. Assessing the pre-IPO financial state of Angkasa Pura II is believed to be crucial before the Company goes ahead with an IPO decision. The assessment would require the valuation of the Company’s net worth. It is necessitated in order to accurately determine the underlying fundamental values of the eventual shares. The study had looked into the perspectives of both the absolute and relative valuations of the Company. Absolute valuation models were to uncover the Company’s underlying, sole value as a firm of its own and had employed the FCFF and three-stage DDM models as the courses. Relative valuation models were to stage market perceptions on the firm value and had taken advantage of the forward P/E and EV/EBITDA multiples as the courses. Both absolute and relative valuation models developed for the purpose of this study had fundamentally suggested that Angkasa Pura II could very well raise more capital than what the Company had intended to in the past. The study was most confident in both the absolute valuation models, more so on the FCFF model for its intricacy in contemplating historical financial records to then forecast the Company’s future financial performance. The FCFF model prompted significantly high intrinsic value for the Company, which in return should appeal prospective investors to purchase the Company’s stock at a high initial price.