Stock Valuations in Cement Companies: Evidence from Indonesia Stock Exchange

Riko Hendrawan, Rijikan, Hiro Tugiman

2019

Abstract

This research aimed to assess the fair value of stock price at Cement Companies listed in Indonesia Stock Exchange using Discounted Cash Flow (DCF) with Free Cash Flow to Firm (FCFF) approach to calculate the value of a company and Relative Valuation methods with Price Earning to Ratio and Price Book to Value approach to validate DCF result. The samples of this research are Indocement Tunggal Prakarsa (INTP), Holcim Indonesia (SMCB) and Semen Baturaja (SMBR) which are the big three cement company. The research data were derived from historical data 2013 – 2017 which considered as reference for projection years 2018 – 2022 involving three scenarios namely pessimistic, moderate and optimistic scenario and the value of the research compared within market price on January 2, 2018. Findings from this research showed that using DCF FCFF fair value on INTP has overvalued in all scenarios, for SMCB and SMBR have overvalued in the pessimistic scenario but undervalue in moderate and optimist scenarios. Furthermore, in relative valuation method within PER and PBV, the research is within the industry range that means the result of a calculation is proper. The conclusion of this research is to recommend selling INTP shares, buying SMCB and SMBR shares.

Paper Citation

in Harvard Style

Hendrawan R., Rijikan. and Tugiman H. (2019). Stock Valuations in Cement Companies: Evidence from Indonesia Stock Exchange.In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World - Volume 1: ICIB, ISBN 978-989-758-408-4, pages 45-54. DOI: 10.5220/0008427400450054

in Bibtex Style

@conference{icib19,
author={Riko Hendrawan and Rijikan and Hiro Tugiman},
title={Stock Valuations in Cement Companies: Evidence from Indonesia Stock Exchange},
booktitle={Proceedings of the 2nd International Conference on Inclusive Business in the Changing World - Volume 1: ICIB,},
year={2019},
pages={45-54},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008427400450054},
isbn={978-989-758-408-4},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd International Conference on Inclusive Business in the Changing World - Volume 1: ICIB,
TI - Stock Valuations in Cement Companies: Evidence from Indonesia Stock Exchange
SN - 978-989-758-408-4
AU - Hendrawan R.
AU - Rijikan.
AU - Tugiman H.
PY - 2019
SP - 45
EP - 54
DO - 10.5220/0008427400450054