VALUATION OF MINING COMPANY PT ADARO ENERGY TBK. BY USING DISCOUNTED CASH FLOW

• Main Author: Perwira Manurung, Jonathan
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/61605
• Institution: Institut Teknologi Bandung

Mining business requires very large capital to carry out its activities and development. With the company's entry into the capital market, it is expected to get more investment and strengthen the company's finances. The difference in the value of stock shares in the secondary market and their fair value can make the investor's decision to profit from purchase of stock shares be wrong. Therefore, a study was conducted to calculate the fair price of stock shares represented by their intrinsic value by using discounted cash flow analysis. The purpose of this study is to provide recommendations to investors before buying, selling, or maintaining their assets through the shares of PT Adaro Energy Tbk. (ADRO). Several financial parameters such as cost of equity, cost of debt, projected discounted cash flow, and terminal value become the basis for estimating the intrinsic value of ADRO shares. After calculating, it was found that the intrinsic value of ADRO shares is Rp. 1,510 for each share. From these calculations, it is found that the intrinsic value of ADRO is cheaper than the stock price in the secondary market, which is Rp. 1,345 for each share, so it has the potential to increase by 12.24% to its intrinsic value. To support this valuation, a relative valuation analysis was also carried out using PER and PBV analysis. It was found that the PER and PBV values of ADRO's shares were relatively cheaper when compared to the average company with the same characteristics. Therefore, it is recommended that investors maintain their ADRO shares and potential investors can buy ADRO shares.