ANALYSIS OF FINANCIAL PERFORMANCE AND THE IMPACT OF MAIZE PRICE VOLATILITY ON STOCK VALUATION OF PT CHAROEN POKPHAND INDONESIA TBK

• Main Author: Ilham Nadhief, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/65068
• Institution: Institut Teknologi Bandung

Indonesia is one of the countries with the largest population in the world. According to BPS data in 2020, Indonesia's population reaches more than 270 million people. The Central Statistics Agency (BPS) recorded the contribution of the agricultural sector to the Gross Domestic Product (GDP) in 2020 of 13.70%, the second largest after the manufacturing sector (19.88%). The poultry industry produces products as the largest source of animal protein in addition to meat, fish and others. In addition, the poultry industry also absorbs 10% of the total Indonesian workforce. PT Charoen Pokphand Indonesia Tbk (CPIN) is the market leader in this industry. In 2020, CPIN has a 34% share for animal feed products and 28.25% for chicken meat products from total national production and a market capitalization of around Rp 106.99 trillion. CPIN integrates all business segments from upstream to downstream. However, the upstream segment, namely the animal feed segment, requires corn as raw material, which is not included in the CPIN business segment. Corn raw materials are obtained from other companies outside of CPIN. Corn is a commodity that has price fluctuations that are influenced by supply and demand in the market. These fluctuations create uncertainty in CPIN's operational costs so that it will affect the valuation of CPIN itself. The fair value of CPIN is calculated by considering the factors influencing its assessment, both internal and external factors. Root cause analysis was conducted to determine the factors that influence stock valuation. A linear regression model was used to determine how much influence the world corn price had on the gross profit margin of CPIN. Calculation assessment using the absolute valuation method (DCF) and relative valuation will show the fair value of CPIN at the end of 2020. The sensitivity analysis is carried out to provide an overview of changes within a certain range of factors that affect the company's stock valuation. With the DCF method, the valuation of CPIN's shares at the end of 2022 is IDR 3,388. Then by carrying out a sensitivity analysis on three factors that affect stock valuation, such as changes in corn price growth, terminal value growth, and the risk-free rate, the stock valuation will be in the range of IDR 2,879 to IDR 4,186.