Assessing Free Cash Flow to Firm and Relative Valuation Method in Agriculture Plantation Companies Listed in Indonesia Stock Exchange in 2018

Riko Hendrawan, Ernis Himawan

2019

Abstract

As we know Indonesia is producer the largest CPO and the biggest Muslims in the world. Based on these two points, the researcher tried to analyze agricultural plantation companies shares listed on the Indonesia Stock Exchange especially sharia shares in 2018. The Stability of global CPO prices greatly influences fluctuations stock price in the agriculture industry, why company valuation is needed. The Assessing method employed DCF with the FCFF approach, and the Relative valuation method with PER and PBV approaches. The 2013-2017 financial report is a basis for projections examination during period 2018-2022, an example in research is a company that has the most substantial market value and equity in the ISSI Index - consisting of AALI, SIMP, and LSIP applied in the pessimistic, moderate, and optimistic scenario. The results of this study by adopting the DCF-FCFF method in all three scenarios, AALI intrinsic value, and LSIP considered to overvalued, SIMP is undervalued. By employing Relative valuation method using the PBV and PER approach; the AALI, SIMP and LSIP values still lie in the industry range based on IDX 1st Quartal 2018. Referring to the calculation results, this study recommends sales for AALI and LSIP, buying for SIMP.

Paper Citation

in Harvard Style

Hendrawan R. and Himawan E. (2019). Assessing Free Cash Flow to Firm and Relative Valuation Method in Agriculture Plantation Companies Listed in Indonesia Stock Exchange in 2018.In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World - Volume 1: ICIB, ISBN 978-989-758-408-4, pages 85-93. DOI: 10.5220/0008427800850093

in Bibtex Style

@conference{icib19,
author={Riko Hendrawan and Ernis Himawan},
title={Assessing Free Cash Flow to Firm and Relative Valuation Method in Agriculture Plantation Companies Listed in Indonesia Stock Exchange in 2018},
booktitle={Proceedings of the 2nd International Conference on Inclusive Business in the Changing World - Volume 1: ICIB,},
year={2019},
pages={85-93},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008427800850093},
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 - Assessing Free Cash Flow to Firm and Relative Valuation Method in Agriculture Plantation Companies Listed in Indonesia Stock Exchange in 2018
SN - 978-989-758-408-4
AU - Hendrawan R.
AU - Himawan E.
PY - 2019
SP - 85
EP - 93
DO - 10.5220/0008427800850093