A VALUATION OF REAL ESTATE COMPANY PT XYZ

• Main Author: Arel, Alexander
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38732
• Institution: Institut Teknologi Bandung

For the past 5 years, the property and real estate industry has been growing stagnantly even though the economic growth in Indonesia has a positive trend. The economy also rebounded after the global recession in 2009 over the past few years. The property and real estate industry has been contributing to the GDP of Indonesia and it has been growing from 2011 for almost 50% to 2015. Although the contribution amounted for around Rp329.8 trillion to the whole economy of Indonesia, one of the company of real estate shows a negative correlation through their earnings in the past few years. PT XYZ is one of the largest property and real estate companies in Indonesia and it has a negative trend in its earnings. Based in Jakarta, the company has more than 10 years of experience in the same industry as it was as it entered the listing of Jakarta Stock Exchange. To evaluate the company’s performance, the author uses the discounted cash flow method and the comparable method to measure for undervalued or overvalued condition of the share price. Having the market value and the intrinsic value of the company, the author could determine whether the company is underperforming the expectations of the market or not. The comparable is used to determine whether the value of the stock is overpriced towards similar companies in the real estate industry. The valuation shows that the company is not performing at their best throughout the years. The overvalued of the company shown from the downside of the intrinsic value of Rp644 towards its share price of Rp1,174 and by using the P/E Ratio by comparing XYZ with other companies, the author can understand that the company is overpriced.