VALUATION OF BUKIT ASAM LTD STOCK USING DISCOUNTED CASH FLOW VALUATION AND RELATIVE VALUATION

• Main Author: Rafli Hanan Mahendra, Muh
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/76831
• Institution: Institut Teknologi Bandung

Several mining companies in Indonesia choose to participate in the capital market (go public) through an initial public offering (IPO) to attract more investments and enhance their financial stability. The potential investment can be seen with the increasing number of investors available in the capital market. The relatively volatile movement of stock prices in the secondary market, along with the fair value of the company, leads to a perception of high risk, which creates doubts for investors to invest. This study aims to determine the fair value of PTBA's stock using the discounted cash flow (DCF) valuation method (FCFE model) and relative valuation to determine the status of PTBA's stock price (overvalued, fair valued, or undervalued). Based on the analysis using the DCF valuation method (FCFE model), the intrinsic value of PT Bukit Asam Tbk's stock is Rp2,326 per share. This indicates that the current stock price of PTBA (May 25, 2023) of Rp3,010 is above this value (overvalued). To support this valuation, a relative valuation was conducted, which showed that PTBA's PBV, PER, and EV/EBITDA values are above the market average (overvalued relative basis). Therefore, the current stock price of PTBA, which is Rp3,010 (May 25, 2023), is considered expensive (overvalued), and it is recommended for prospective investors to postpone investing in PTBA's stock as it may potentially incur a loss of 22%.