Equity Valuation on Property and Real Estate Listed Companies in 2018: Evidence from Indonesia Stock Exchange

Riko Hendrawan, Palti M.T. Sitorus, Ernest L.P. Siagian

2019

Abstract

Investment in the form of shares of stock valuation analysis is required to estimate the intrinsic value or a reasonable price of the stocks based on fundamental data. The objective of this study was to valuate the intrinsic value of stock price at Property and Real Estate Companies listed on IDX 2018. The valuation was carried out comprehensively by using Discounted Cash Flow (DCF) method of Free Cash Flow to Firm (FCFF) approach, and to validate the results this study used the Relative Valuation method with Price to Earnings Ratio (PER) and Price to Book Value (PBV) approaches. The methods were applied in three scenarios of pessimistic, moderate and optimistic with the historical data of the companies from 2013 to 2017 as the basis for the projections of the 2018-2022 period. By comparing the results of the fair value of the stocks in the market on January 1, 2018, the DCF-FCFF method concluded that CTRA was undervalued in all scenario, while LPKR and BSDE were overvalued in all scenario. The PER and PBV analysis found that all evaluated stocks within the industry ranged. It means that the valuation results are correct. Therefore, in conclusion, this study recommends to sell LPKR and BSDE shares and buy CTRA shares.

Paper Citation

in Harvard Style

Hendrawan R., Sitorus P. and Siagian E. (2019). Equity Valuation on Property and Real Estate Listed Companies in 2018: 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 65-73. DOI: 10.5220/0008427600650073

in Bibtex Style

@conference{icib19,
author={Riko Hendrawan and Palti M.T. Sitorus and Ernest L.P. Siagian},
title={Equity Valuation on Property and Real Estate Listed Companies in 2018: 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={65-73},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008427600650073},
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 - Equity Valuation on Property and Real Estate Listed Companies in 2018: Evidence from Indonesia Stock Exchange
SN - 978-989-758-408-4
AU - Hendrawan R.
AU - Sitorus P.
AU - Siagian E.
PY - 2019
SP - 65
EP - 73
DO - 10.5220/0008427600650073