Articles

Stock Valuation of PT. Panca Budi Idaman, Tbk. (PBID) based on Free Cash Flow to the Firm and on Relative Valuation

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The stock valuation of PT Panca Budi Idaman, Tbk. (PBID), an Indonesian plastic packaging manufacturer, is evaluated using the absolute and relative valuation. The absolute valuation is based on Discounted Cash Flow (DCF) method. In relative valuation, PBID is compared to its peers, which in this study are IPOL, PDPP, and TRST. Indonesia’s significant economic growth and the vital role of the plastic industry are noting strong demand for plastic packaging despite environmental challenges and regulatory pressures. Financial performance from 2017 to 2023 is assessed through profitability, liquidity, and solvency ratios, demonstrating PBID’s efficient operations and robust financial health. Future cash flows are projected, discounted using PBID’s Weighted Average Cost of Capital (WACC), and the terminal value is calculated. The intrinsic value is estimated at IDR 3,987 per share, indicating undervaluation compared to the current price of IDR 1,325 per share. Relative valuation compares PBID to industry peers using EV/EBITDA, P/E, and P/B ratios, reinforcing the undervaluation finding. Investment recommendations suggest PBID’s stock as a buying opportunity due to its strong market position and favourable valuation metrics.

Examination Stock Underperformance Leveraging Financial Ratios, Intrinsic Valuation, and Multiple Market Approach (Case Study: Indonesia Leading MRO Company)

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AMF a prominent MRO company in Asia-Pacific region, especially Indonesia, has experienced decline in stock performance since its IPO in 2017. This study aims to discover factors contributing in company’s declining value and provide feasible recommendation to improve stock performance and financial health. A ten-year financial report assessment from 2014 to 2023 was conducted to gain a broader overview of company’s financial condition. This study examines financial ratios and compared to industry average through Multiple Market Approach. External risk affecting the underperformance of stock are also evaluated through PESTEL and Porter’s Five Forces. Result of the study indicate underperformance of AMF is due to decreasing profitability margin, inefficient use of assets, increasing operational expenses, and unfavourable external economic condition. The evaluation also reveal that the stock undervalued by market, where this statement is reinforced by intrinsic value of company is 3.88x higher than current market price, as well as supported by comparisons with similar industries where the financial ratios such as P/E ratio, M/B ratio, and EV/EBITDA are below industry average. The analysis proposes stock performance enhancement and financial stability by optimizing operational processes, capitalizing on technological advancement, and establishing strategic partnership to diversify revenue streams and enhance market presence.