THE STOCK VALUATION OF PT. GAJAH TUNGGAL TBK
In 2018, PT Gajah Tunggal Tbk (GJTL) was loss in net profit amount IDR 74.6 billion. The main problem is because of depreciation of Indonesia Rupiah to US Dollar. The company’s COGS increase by 10.4% from the previous year. Higher raw material prices primarily caused the increase. The company still...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/46518 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | In 2018, PT Gajah Tunggal Tbk (GJTL) was loss in net profit amount IDR 74.6 billion. The main problem is because of depreciation of Indonesia Rupiah to US Dollar. The company’s COGS increase by 10.4% from the previous year. Higher raw material prices primarily caused the increase. The company still imports raw materials, such as materials chemicals, steel cord, bead wire, and carbon black, in which the price increased during the year. The dependency of imported raw materials made the company experienced margin pressure due to loss in foreign exchange. During this period, the GJTL’s stock price is decline.
After the identified problem, the objectivity of this study is to define the intrinsic value of GJTL. Start from the analysis of the internal and external conditions. The external analysis uses PESTEL and Porter’s Five Forces to describe the external environment. Meanwhile, the internal analysis uses financial ratios to identify the financial performance of the company during the period. Next, use SWOT analysis to make business strategy, stock valuation, and risk assessment. For valuation, use absolute valuation, which is the DCF method, to define the intrinsic value of GJTL. The last is sensitivity analysis and Monte Carlo simulation.
Based on absolute valuation, use FCFE model ten years forecast, the result is the intrinsic value is IDR 1,213.26 per share is undervalued to current stock price (September 30, 2019) was IDR 650. Sensitivity analysis to find the most sensitive variable influences the intrinsic value. The result is the dollar exchange rate that the most sensitive variable that influences the stock price.
For recommendation, the potential return above 15% to make investors interested in purchasing the GJTL’s stock. According to CFA's standard above 15%, the probability is 63.92% of the current market price. The recommendation is to Buy GJTL’s stock price.
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