FINANCIAL PERFORMANCE ANALYSIS AND STOCK VALUATION OF COAL MINING COMPANY DURING COVID19 PANDEMIC (CASE STUDY: ADARO ENERGY INDONESIA)

• Main Author: Angelica Meylina P, Natashya
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/67328
• Institution: Institut Teknologi Bandung

Coal is one of the commodity that is mined and consumed a lot in Indonesia and also the world. The thermal coal is needed for the electricity meanwhile metallurgical coal is needed in the steel making industry. Towards mid-2021, the coal price has escalated to all time high. It affects stock price performance of several coal mining companies in Indonesia. From having a bad downturn in 2020 due to Covid-19 and less energy demand, coal starts to gain more demand in 2021 in line with more industrial activities and economic recovery from the crisis during pandemic. According to PLN’s (Indonesia’s electricity power company) RUPTL 2021 – 2030, the portion of coal in the fuel mix would remain around 60% until 2030 with planned new installed capacity during the period of 14 GW. At least there are two factors that still give coal am important place in the power sector. First, the generation cost is low if coal is used, second there is plenty of coal reserves and supply in some countries including Indonesia. In Indonesia, one of the coal mining company with the huge reserves and market capitalization is Adaro Energy. The purpose of this research is to analyze the intrinsic value of Adaro Energy to help investors gain insight especially after the world economy is recovering after two years in the pandemic crisis. The financial performance of Adaro Indonesia will be projected for the upcoming five years. From the calculation using Discounted Cash Flow, it is found that the intrinsic value is IDR3.263,56. Considering the market value of Adaro in the closing date of 2021 is IDR2.250, thus the expected rates of return is 45% or IDR1.014,00; from DCF calculation that includes the aluminum smelter operating in 2024, the fair value is IDR3.842 (undervalued with return 70,6%); from DDM calculation, the fair value is IDR3.494,05 (undervalued with 55,3% return); from PBV calculation, the fair value is IDR3.513 (undervalued with return 56%); from EV/EBITDA calculation, the fair value is 2.605 (undervalued with return 16%).