BUSINESS VALUATION OF INDONESIAN REAL ESTATE DEVELOPMENT COMPANY POST COVID-19 PANDEMIC – A CASE STUDY AT SINARMAS LAND LTD.

• Main Author: Nadhifian Reksoprodjo, Risyad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/74592
• Institution: Institut Teknologi Bandung

The real estate industry in Indonesia has been a key driver of the country’s development and economic growth, serving as a catalyst for job creation, infrastructure development, and attracting investments into the country from both domestic and international sources. The industry itself has seen sustained growth throughout the years, which is driven by the growing economy, rising population, and increasing disposable income of people in Indonesia. However, challenges do exist in the industry, ranging from oversaturation of products in the market, to temporary lowered demand due to the Covid-19 pandemic. Despite these challenges, the sector is still very promising and expected to grow rapidly in the coming year, supported by various government initiatives and policies to support and sustain the growth of the real estate industry. Investing into this industry could be a viable venture, and one of the ways to do it is to invest in one of Indonesia’s real estate developers such as Sinarmas Land Ltd, one of the largest development corporations in Indonesia, and a very prominent player in the market. Before investing into the company, it is vital to study and do due diligence on the market and the company itself, and that is the goal of this thesis. This thesis presents a comprehensive valuation analysis of Sinarmas Land Ltd (A26:SGX), which employs external analysis of the Indonesian real estate industry, internal analysis of the company itself, financial ratio analysis, absolute valuation using the Discounted Cash Flow (DCF) method, and relative valuation using the Price to Equity Ratio (PER) and Enterprise Value to EBIDTA (EV/EBITDA) method. In this context, the valuation analysis of Sinarmas Land offers valuable insight into the company’s performance and what potential it has within the Indonesian real estate industry. By using the DCF method, the study assesses future cash flows of the company, considering the risk factors and potential in the market, to determine the intrinsic value of Sinarmas Land. Furthermore, the financial ratio analysis that is conducted provides deeper understanding of Sinarmas Land’s financial health and operational effectiveness, showing its strengths and areas where improvements can be done. Additionally, the relative valuation using PER and EV/EBIDTA compares the financial metrics of the company to those of similar companies in the industry, showing the company’s performance in the market and determining the competitiveness and growth prospects of the company. The findings of this study contribute to a broader understanding of Sinarmas Land’s intrinsic value and competitive position within the industry. This study will be valuable to potential investors, analysts, and industry parcitipants seeking to make informed decisions and capitalize on the opportunities presented by the Indonesian real estate sector.