Discounted cash flow valuation of global public company limited.

Abstract

This thematic paper demonstrated how to value the stock price of Siam Global House Public Company (GLOBAL) which applied the concept of the discounted cash flow model. It reflected the company’s ability whether they can survive and grow without equity or debt. This study planned to project the company’s cash flow, which including the same store sales growth, weighted average cost of capital and terminal growth, in order to calculate the value of the company. As GLOBAL showed negative SSS growth in quarter1 of 2014 and could not reach its target to open total 12 new GLOBAL stores. Moreover, negative cash flow was shown from running the 5 year discounted cash flow model (2014-2018). Therefore, performing long-term forecasting from 2019 to 2024 is required in order to get positive cash flow. The result showed overvalue of the stock price when compared to the current price (24 October 2014), therefore it is recommended to SELL this stock.

KEY WORDS: Global house / Valuation / Same store sales growth / Discounted cash flow/ Home improvement