Discounted cash flow valuation of Thai optical group public company limited.

Abstract

This thematic paper demonstrated how to value the stock price specifically Thai Optical Group Public Company Limited (TOG) in which the framework of discounted cash flow to firm model is applied. The process starts with creating a forecast, calculating a reasonable valuation and recommending to buy/hold/sell the company stock. TOG is a well-recognized independent manufacturer and distributor of qualitied optical lenses and optical related products in which approximately 95% of TOG products are for exportation to different geographic locations. TOG is unique in term of its peer’s valuation as there are non-other similar firms listed under the same consumer products industry: personal product & pharmaceuticals sector. Thus, TOG is valued in comparison with other international peers such as leading Essilor and Hoya which are operating in similar business model and industry. The result from this paper illustrates the fair value of TOG share price which is expected to be valued higher than the current share price as of Dec 2016 by 30%. The result obtained has the recommendation of “BUY” as the current share price is still undervalued.