BUSINESS PERFORMANCE AND STOCK VALUATION OF PT. SILOAM INTERNATIONAL HOSPITALS: AN ANALYSIS OF THIS INDONESIAN HEALTHCARE COMPANY'S POST-COVID-19 PANDEMIC RESILIENCE

• Main Author: Evita Thalia, Gloria
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/79813
• Institution: Institut Teknologi Bandung

The COVID-19 pandemic impacted the economic landscape globally, and Indonesia is not an exception. Since the beginning of the pandemic and the following years, Indonesia’s gross domestic product (GDP) fell considerably. This is seen in the stock market with a 5.1% decrease of Jakarta Composite Index (JCI) in 2020, and 7.8% decrease in LQ45 Index. However, IDXHEALTH, the index measuring performance of stocks in the healthcare industry, saw a significant 17.8% increase in 2020. The Government of Indonesia (GOI) has taken steps to cope with the impacts of the pandemic in the country, allocating the resources needed. In the midst of recovering from the pandemic, the GOI also has to strive towards fulfilling the Sustainable Development Goals (SDGs) by 2030. The significant economic growth of the healthcare industry and increasing support from the government shows a tremendous potential for growth. PT Siloam International Hospitals Tbk. (SILO) is among hospitals with the largest market capitalization in Indonesia. As a healthcare provider, Siloam Hospitals also was greatly impacted by the COVID-19 pandemic, but it managed to be the hospital with the highest 3-year price returns at 201.26%. This study aims to evaluate the performance and valuation of PT Siloam International Hospitals Tbk in the postCOVID-19 pandemic period to provide guidance for investment decisions. A valuation of the company is done using the Discounted Cash Flow (DCF) method based on financial statements from the year 2018 to 2022. It is found that the company’s intrinsic value per share varies according to assumptions on the company’s growth ranging from overvalued at 121% to undervalued at 16%. Relative valuation is also done, and it is found that the company’s Price/Earnings ratio is 17.62, Price/Book ratio is 2.3 and EV/EBITDA ratio is 8.05. These values are lower than the industry and sector average, indicating that it is relatively undervalued with target prices higher than the current price. Based on the analysis of the company, healthcare landscape and factors affecting it, the author recommends potential investors to buy this stock with caution.