Discounted cash flow valuation of Ichitan group public company limited.

Abstract

This thematic paper demonstrated how to value the stock price of Ichitan Group Public Company Limited (ICHI) which applied the concept of discounted cash flow to firm model, creating a forecast and calculating a reasonable valuation of the firm’s share price and at the end making decision whether to buy/hold/sell the company’s stock. Ichitan Group (ICHI) is a leading ready-to drink tea brand in Thailand, with a 44% market share in year 2014 which is one of the top three market share. Moreover, the company acquire “Bireley” the new product which expected to become the star that brings growth back to ICHI at 5% of revenue. However, the slowing down of ready to drink tea market and high competitive leads to high spending in advertising and promotion. The interesting point is that the unclear successful signs for investment in Indonesia. The result from this paper shows the 3 years’ future value of ICHI share price is expected to be valued higher than the current share price by 23.8%. The stock price is quite close to the current stock price at this moment. There are abilities to growth from Bireley and the concentrate in cost effective control. However, the unclear resulted from investment Indonesia. This results lead to my recommendation of “hold”.