VALUATION OF PT ADARO ENERGY TBK AS IMPACT OF COAL PRICE AND IMPLEMENTATION OF UU NO 3 YEAR 2020

• Main Author: Faisal Rahman, Idam
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/53063
• Institution: Institut Teknologi Bandung

The House of Representatives of Indonesia has passed a revision of Coal Mining Law Undang-Undang No 3 Tahun 2020. It is become controversial in the middle of pandemic Covid-19 in Indonesia. However, this coal mining law will give new impact in the operation and financial of the holders of First Generation of CCOW (Coal Contract of Works) / PKP2B (Perjanjian Karya Pengusahaan Pertambangan Batubara). Coal price has been volatile since 2012 until now are also critical factor of the financial performance of coal company. Base on condition above, study of valuation has been done to ADRO as holders of First Generation CCOW under their subsidiary PT Adaro Indonesia. Discounted cash flow with three different forecast methods (naive forecast, ARIMA/SARIMA, Geometric Brownian Motion) are used to determine coal price forecast that will give impact on their revenue as well as relative valuation. Cost impact as effect of UU Year 3 2020 also implemented in this calculation to determine how much the effect. The result shows that in the base case the valuation of ADRO reduced 14.6 % from $ 4,577 million to $ 3,910 million and the intrinsic value of the equity reduce 16.9% and compared to their price in closing 31 Dec 2019 is 8.1% overvalued.