STOCK VALUATION OF A GEOTHERMAL COMPANY IN INDONESIA CONSIDERING CARBON TRADING ACTIVITY CASE STUDY: PT PERTAMINA GEOTHERMAL ENERGY

• Main Author: Haris Nugroho, Fawzi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/79899
• Institution: Institut Teknologi Bandung

Geothermal energy is positioned as a clean, renewable, and reliable source, with Indonesia holding a significant share of the world's geothermal resources. Despite the vast potential, only a fraction has been utilized, presenting both an opportunity and a challenge for PGEO. The company, with a market capitalization of IDR 61.8 trillion, operates 13 geothermal power plants with a total capacity of 1,877 MW and has plans to expand by 600 MW by 2028. The research delves into the financial intricacies and challenges faced by PGEO. A key aspect of the thesis explores the potential of carbon trading as a revenue stream for PGEO. Against the backdrop of a burgeoning carbon credit market, driven by global climate change initiatives, regulatory advancements, corporate sustainability commitments, and increased investor interest, the research assesses the feasibility and growth prospects of this new revenue source. The analysis resulted in the carbon credit revenue to amount to 0.75% - 11% of the total revenue in 2033. This research underscores the importance of analyzing the external and internal condition of the company, and forecasting both the traditional electricity generation business and the emerging carbon trading activities to chart the trajectory of PGEO in navigating the evolving landscape of renewable energy and sustainable development. Valuation methods used in this research to value PGEO’s stock price using absolute valuation method such as DCF method and relative valuation method resulted in the value at a range of IDR1.469 - IDR 1.862 indicating that PGEO’s stock price is undervalued.