COMPANY FAIR VALUATION CONSIDERING ESG FACTOR (CASE STUDY : PT PERTAMINA GEOTHERMAL ENERGY, TBK)
he increments of environmental, social, and governance-based investments have been seen recently by institutions or retail investors. The growth has increased rapidly since 2012. Some research gives a positive correlation between the ESG factor represented by ESG rating and company performance....
Saved in:
| Main Author: | |
|---|---|
| Format: | Theses |
| Language: | Indonesia |
| Subjects: | |
| Online Access: | https://digilib.itb.ac.id/gdl/view/76502 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | he increments of environmental, social, and governance-based investments have
been seen recently by institutions or retail investors. The growth has increased
rapidly since 2012. Some research gives a positive correlation between the ESG
factor represented by ESG rating and company performance. PT Pertamina
Geothermal Energy, Tbk. (PGEO), IPO on 24th February 2023 has outstanding
ESG performance. It was audited by Sustainable Fitch and got the highest second
rank, 77 from 100 points. Not only exceptional ESG performance but it also has
excellent business performance. PGEO started its journey of geothermal utilization
in 1974, upon discovering 70 geothermal areas in Indonesia as a sub-business of PT
Pertamina EP. PGEO was established in 2006 to continue the efforts to produce
clean and environmentally friendly energy, and as of now has contributed 82% of
the installed geothermal energy capacity in Indonesia. It has the world's most
extensive geothermal installed capacity by December 2021 and promises to expand
even more significantly in its prospectus. Investors should consider their value
rather than positive sentiment as an investment decision. Then this study
determines whether the PGEO price is undervalued or overvalued considering their
project expansion and ESG factor. This study utilizes secondary data from
prospectuses, financial statements, annual reports, sustainability reports, companypublished
documents,
and data from IDX.co.id and stockbit.com. The data was
gathered and processed to understand the need to expand, analyze its financial
performance, and value the company. The author considers company ESG
performance to develop financial projections. To fulfill company promises in
expansion and stay sustained by adding more production, injection, and startup
well, its needs 1.588.612.527 USD using green bonds. The historical financial
performance of PGEO is quite good, but the investor should be careful about its
liquidity since the current liability is more significant than its current asset. Based
on the calculation of absolute valuation using discounted cash flow, the value of
each share of PGEO is Rp12.686,00, which is undervalued, and its IPO price is
Rp875,00. Based on relative valuation using PER to its peers and average industry,
PGEO's price is overvalued. The PGEO price that pars with the industry average
is Rp490,00. The author can determine the fundamental value of PGEO.
|
|---|