Metal and Mineral Mining Firm’s Equity Valuation in Indonesia Stock Exchange

Marfani Hasan, Riko Hendrawan

2019

Abstract

The purpose of this research is to estimate the intrinsic values of the shares on the metal and mineral mining companies listed in IDX 2018 using Discounted Cash Flow - Free Cash Flow to Firm method and verifies the results with the relative valuation - PER and PBV methods. The sample of this research is the dominant industry players ANTM, INCO, and TINS. The valuation baseline was the analysis of the financial statements of those companies in the period 2013-2017 which was considered as the reference for the projection years 2018-2022. This research involved three scenarios namely pessimistic, moderate and optimistic, and the reference market price was on January 2, 2018. The analysis concluded that using DCF-FCFF the stock’s price of ANTM was undervalued in all scenarios, while INCO and TINS were overvalued in all scenarios. The PER and PBV analysis found that all evaluated stocks within the industry range that mean the valuation result is correct. Hence, the conclusion of this research is to buy ANTM stocks and to sell INCO and TINS stocks.

Paper Citation

in Harvard Style

Hasan M. and Hendrawan R. (2019). Metal and Mineral Mining Firm’s Equity Valuation in 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 662-673. DOI: 10.5220/0008435106620673

in Bibtex Style

@conference{icib19,
author={Marfani Hasan and Riko Hendrawan},
title={Metal and Mineral Mining Firm’s Equity Valuation in Indonesia Stock Exchange},
booktitle={Proceedings of the 2nd International Conference on Inclusive Business in the Changing World - Volume 1: ICIB,},
year={2019},
pages={662-673},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008435106620673},
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 - Metal and Mineral Mining Firm’s Equity Valuation in Indonesia Stock Exchange
SN - 978-989-758-408-4
AU - Hasan M.
AU - Hendrawan R.
PY - 2019
SP - 662
EP - 673
DO - 10.5220/0008435106620673