DISCOUNTED CASH FLOW VALUATION OF TIPCO ASPHALT PUBLIC COMPANY LIMITED.

Abstract

The stock market which acts as a source of funding for the firms and source of investment for the investors, is changing every second due to both internal and external factors and circumstances. Fast information updates and careful analysis of the targeted firms are crucial for taking into consideration whether to take buy-sell-hold action on their stocks. Tipco Asphalt Public Company Limited (TASCO) is the leading manufacturer and distributor of asphalt related products in the Asia-Pacific region, with strong market position and high potential in business growth. The interesting point is how the changing landscape of the oil market has greatly improved their cost structure and their investment plans to maintain the market leader position; both of which will affect to their stock price, but in which way? This is the motivation why I choose TASCO to analyse their business and financial situation, creating a forecast and calculating a reasonable valuation of the firm’s share price using the “discounted cash flow” method. The result from this paper shows the five years’ future value of TASCO share price is expected to be valued higher than the current share price by 29.11%. This results lead to my recommendation of “buy” because the current share price is considered to be undervalued.